What is FLBR?
The Franklin FTSE Brazil ETF (ticker: FLBR) seeks to track an index composed of large- and mid-cap Brazilian equities. The fund offers investors a single-country view and targeted exposure to companies operating in Brazil.
Founded in 2017, FLBR is currently one of the largest passively managed index funds for Brazilian equities in Latin America, with over $580 million in total assets under management. It is often compared to the iShares MSCI Brazil ETF (ticker: EWZ), which is the oldest and largest fund in this space.
Characteristic
| Characteristic | Detail |
|---|---|
| Ticker Symbol | FLBR |
| Issuer / Manager | Franklin Templeton |
| Target Market | Brazilian Equities (Large- and Mid-Cap) |
| Inception Date | November 2, 2017 |
| Index Tracked | FTSE Brazil RIC Capped Index |
| Assets Under Management | ~$584 Million (as of May 2026) |
| Expense Ratio | 0.19% annually |
| Number of Holdings | Typically around 70 to 80 (currently 73) |
| Dividend Frequency | Semi-annually |
| Primary Exchange | NYSE American (Priced in USD) |
Methodology
The fund tracks the performance of Brazilian equity companies listed directly in Brazil. Because these companies trade in Brazilian Reais (BRL) but the ETF trades in US Dollars (USD), the fund is exposed to exchange rate variations. The BRL/USD exchange rate is one of the most important factors impacting the fund’s returns.
FLBR is built using a free-float-adjusted, market-capitalization-weighted index. This means the components are weighted based on their market capitalization, but it only counts the shares that are actually available for public trading (the “free float”).
- Example: If a stock has a $10 billion market cap but only 10% of its shares are publicly traded, the ETF only considers $1 billion. Conversely, if a stock has a $2 billion market cap but a 90% free float, $1.8 billion is factored into the index.
This is a common practice used by most major global indices (such as the S&P 500 and MSCI World). It guarantees accurate market representation, prevents closely held companies from disproportionately swinging the index, and ensures liquidity for index funds that must buy and sell these shares.
Rebalancing and Capping:
The ETF is rebalanced quarterly based on its “Parent Index” (the FTSE Brazil Capped Index). To prevent a single massive company from dominating the fund, the index uses a capping methodology. It limits the weight of any single corporate group to a maximum of 25% of the index. Additionally, the sum of all corporate groups that individually hold a weight above 5% cannot exceed 50% of the total index.
The fund generally focuses on large-cap and mid-cap companies, holding between 70 and 80 stocks.
FLBR vs. Ibovespa (IBOV)
The B3 Ibovespa (IBOV), founded in 1968, is the benchmark index for the Brazilian stock market. FLBR and the IBOV are highly similar because both adhere to strict guidelines requiring constituents to be listed directly on the Brazilian exchange (B3). They even share a comparable scope: the Ibovespa generally tracks 79 to 86 assets from about 70 to 80 Brazilian companies, which closely mirrors the stock count in the FLBR.
What Both Indices Miss: The US Listing Trend
In recent years, a growing trend has emerged where new Brazilian companies choose to list directly on US exchanges to access better funding, higher liquidity, and stronger investor appetite. By exclusively tracking B3-listed companies, both FLBR and the IBOV largely exclude these newer listings.
Today, Brazilian companies listed outside of Brazil have grown to represent roughly 10–12% of the total market cap of Brazilian equities. Notable examples of companies excluded from FLBR and IBOV include:
- Financials & Fintech: Nubank (NU) and XP Investimentos (XP), alongside other relevant digital banks and fintechs like PagBank (PAGS), Inter (INTR), and StoneCo (STNE).
- Tech & Health: US markets historically offer better valuations for tech and innovation firms compared to the Brazilian market. Because of this, relevant companies like the health-tech firm Afya (AFYA) and the Brazilian-founded e-commerce platform VTEX (VTEX) are listed exclusively in the US.
- Materials & Mining: Sigma Lithium (SGML), which focuses on lithium extraction and processing exclusively in the Jequitinhonha Valley (Minas Gerais), and Aura Minerals (ORA), a gold mining company with assets in Mexico, Honduras, and Brazil.
Note on Index Inclusion: While FLBR and IBOV strictly exclude these foreign listings, competing indices have different rules. Many of these US-listed tech and small-cap names are currently included in the iShares MSCI Brazil Small-Cap ETF (EWZS), and if they grow large enough, MSCI rules allow them to be included in the broader EWZ.
The Dual-Listing Approach
Not all companies choosing US exchanges completely abandon the Brazilian indices. Recently, established giants have sought dual listings. The most notable example is JBS (JBS), the meat processing giant, which pursued a US listing with a capitalization of more than $14 billion while choosing to remain dual-listed in Brazil. This strategy allows a company to tap into US capital while remaining eligible for both domestic (IBOV) and strict native-listing ETFs like FLBR.
Main Sectors and Top Holdings
Main Sectors
| Sector | Weight (%) |
|---|---|
| Financials | 29.10% |
| Energy | 17.85% |
| Materials | 16.20% |
| Utilities | 14.60% |
| Industrials | 8.08% |
| Consumer Staples | 5.56% |
| Consumer Discretionary | 3.60% |
| Communication Services | 1.80% |
| Health Care | 1.70% |
| Real Estate | 0.82% |
| Information Technology | 0.69% |
Top 10 Holdings
| Ticker | Name | Sector | Weight (%) |
|---|---|---|---|
| VALE3 | VALE SA | Materials | 12.48% |
| ITUB4 | ITAU UNIBANCO HOLDING S-P | Financials | 9.20% |
| PETR4 | PETROBRAS - PETROLEO BRAS | Energy | 8.03% |
| PETR3 | PETROBRAS - PETROLEO BRAS | Energy | 7.29% |
| BBAS3 | BANCO BRADESCO SA-PREF | Financials | 3.84% |
| B3SA3 | B3 SA-BRASIL BOLSA BALCAO | Financials | 3.65% |
| ITSA4 | ITAUSA SA | Financials | 3.18% |
| ABEV3 | AMBEV SA | Consumer Staples | 2.99% |
| SBSP3 | CIA SANEAMENTO BASICO DE | Utilities | 2.77% |
| WEGE3 | WEG SA | Industrials | 2.76% |
FLBR vs. EWZ
The Franklin FTSE Brazil ETF (FLBR) and the iShares MSCI Brazil ETF (EWZ) are the two largest passively managed US indices for Brazilian equities. When deciding between them, investors usually weigh two main differences:
- Portfolio Composition: Because FLBR is composed almost entirely of stocks listed in Brazil, it tracks closer to the local IBOVESPA index. EWZ can sometimes include a slightly broader or different mix based on MSCI’s distinct index rules, but both lack heavy exposure to the US-listed tech and fintech firms mentioned above.
- Expenses & Fees: FLBR has a significantly lower Gross Expense Ratio than EWZ. FLBR charges just 0.19% annually, compared to EWZ’s 0.59%. While EWZ offers higher daily trading liquidity, FLBR allows long-term investors to keep more of their returns over time due to the cheaper fee structure.
See also: Investing in the EWZ ETF: The Complete Guide
How to Invest Globally
Most global investors can access the US-listed FLBR directly. However, due to regional regulations (like UCITS), some European investors must use localized versions.
| Country / Region | Ticker | Exchange Accessed | Currency | Access Method & Fund Type |
|---|---|---|---|---|
| United States | FLBR | NYSE Arca | USD | Primary Native Listing (Franklin FTSE Brazil ETF) |
| UK & European Union | FLXB / FVUB | London Stock Exchange / Xetra | USD / GBP / EUR | Localized Listing (European-compliant UCITS ETF) |
| Canada | FLBR | NYSE Arca | USD | Direct access to the US market via local brokers |
| Australia | FLBR | NYSE Arca | USD | Direct access to the US market via international brokers |
| New Zealand | FLBR | NYSE Arca | USD | Direct access to the US market via international brokers |
| India | FLBR | NYSE Arca | USD | Direct access to the US market (under the LRS remittance scheme) |
| Pakistan | FLBR | NYSE Arca | USD | Direct access to the US market via global brokerage platforms |
| Bangladesh | FLBR | NYSE Arca | USD | Direct access to the US market via global brokers (subject to remittance limits) |
| Philippines | FLBR | NYSE Arca | USD | Direct access to the US market via international apps or banks |
| Nigeria | FLBR | NYSE Arca | USD | Direct access to the US market via global brokers (subject to local FX liquidity) |
| Singapore | FLBR or FLXB | NYSE Arca or LSE | USD | Direct access to US or UK (UCITS often used for tax efficiency) |
| South Africa | FLBR or FLXB | NYSE Arca or LSE | USD | Direct access to US or UK (UCITS often used for tax efficiency) |
Historic Performance & Dividend Yield
FLBR has a policy of paying out dividends twice a year, typically in June and December. Historically, FLBR—much like the broader Brazilian market—features a high dividend yield. Over the last five years, it has consistently returned strong dividend percentages.
| Year | Year End Yield |
|---|---|
| 2026 | - |
| 2025 | 5.19% |
| 2024 | 8.91% |
| 2023 | 5.66% |
| 2022 | 13.16% |
| 2021 | 9.87% |
| 2020 | 1.97% |
| 2019 | 2.54% |
| 2018 | 2.89% |
| 2017 | 1.71% |
| 2016 | 1.81% |
Historic Performance vs. Brazilian Real
Because the underlying companies generate most of their revenue in Brazilian Reais (BRL) but the ETF is priced in US Dollars (USD), the historical price performance of FLBR is heavily tied to the strength or weakness of the Brazilian Real. Currency depreciation can eat into equity gains when converted back to dollars.
Disclaimer: This guide is for informational purposes only and does not constitute financial advice. Always conduct your own research or consult with a licensed financial advisor before making investment decisions.
