Of course, it must be noted that these growth rates are so eye-popping because the markets are relatively small compared with other global pension markets. And not all the news is positive. While Chile has increased the foreign investment percentage for its pension market this year, Argentina has recently re-nationalized all of its pension plans. That makes the situation much trickier for asset managers, who over the past five years had the relative luxury of dealing with private financial services firms running pension assets for the Argentinean government. And it is the kind of problem that will always be a potential risk for asset managers staking claim to growth in less-developed pension markets.

Current ETF Efforts

BGI has 148 iShares in Chile, where U.S. ETFs do not have to be cross-listed specifically, but registered with the local financial authority. Currently, BGI is focused on introducing a wider range of fixed-income iShares for Chile's "hugely growing pension market," as described by Gamba. BGI has $13 billion in ETFs across Latin America, with Mexico representing between $6 billion to $7 billion and Chile with approximately $5 billion in assets.

BGI has 30 people focused on Latin America, and seven each in its Mexico City and Sao Paolo offices. Gamba says those two Latin American offices will double or triple in staff over the next two years.

WisdomTree Investments has also begun an institutional marketing effort in Latin America for its ETFs. And fund giant Vanguard Group is also active in Latin America, specifically in Chile and Mexico.

(Since Vanguard's ETFs are a share class of its existing traditional mutual funds, its institutional marketing focus on Latin America is still tied primarily to the traditional funds.)

Upstarts are on the rise south of the equator, as well. Global X Management, a New York City-based, soon-to-launch ETF sponsor, will be targeting investors across Latin America. It plans to launch country-specific products for Argentina, Peru and Colombia.

And index providers continue to expand their Latin American benchmarks. Global X, for example, has teamed with Dow Jones and FTSE to create custom country indexes for its country-specific Latin American ETFs. Also, iShares recently filed for a country-specific Peru portfolio, based on a brand new MSCI All-Peru Index.

The Retail Reality

Retail mutual fund markets are also growing across Latin America. But it's apparent why ETF companies are going after pension assets first and foremost.

While some $132 billion is projected in foreign investments for Chilean pension assets by 2012, within that same period, just $107 billion is expected to come into foreign-run mutual funds throughout Latin America. What's more, in that time frame, the projected cross-border mutual fund investment from Chile, Colombia, Peru and Argentina combined is only expected to be $61 billion.

The retail equation is much trickier than the pension effort, too. In Chile, for instance, foreign managers are not allowed to promote funds directly to a retail audience.

"Mexico will be the retail driver at first, and in a market like Chile, it is more about setting up the local exchange and platform relationships, having the aspirations, and being ready to go," Gamba said.

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