What is EWZ?
The iShares MSCI Brazil ETF, using the ticker EWZ, seeks to track an index composed of Brazilian equities. The fund offers a way to express a single-country view and gain targeted exposure to companies in Brazil.
Founded in 2000, EWZ is the largest and longest-lasting passively managed index tracking Brazilian equities. Today, it is the biggest equity ETF in Latin America with over $10 billion in total capitalization, surpassing even the iShares Latin America 40 ETF (ILF) at $4 billion and the iShares MSCI Mexico ETF (EWW) at $2 billion.
Caracteristcs
| Characteristic | Detail |
|---|---|
| Ticker Symbol | EWZ |
| Issuer / Manager | iShares (BlackRock) |
| Target Market | Brazilian Equities (Mid- and Large-Cap) |
| Inception Date | July 10, 2000 |
| Index Tracked | MSCI Brazil 25/50 Index |
| Assets Under Management | ~$10.1 Billion (as of May 2026) |
| Expense Ratio | 0.59% annually |
| Number of Holdings | Typically 40 to 50 (currently ~46) |
| Dividend Frequency | Semi-annually (typically June and December) |
| Primary Exchange | NYSE Arca (Priced in USD) |
Methodology
The fund aims to track the performance of Brazilian equity companies listed both inside and outside of Brazil. Because of this, the fund is exposed to exchange rate variations—the most important being the BRL/USD (Brazilian Real to US Dollar) exchange rate.
The fund is built using a free float-adjusted market capitalization-weighted index. This means the components are weighted based on their market capitalization, but only counting 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% is free float, the ETF considers only $1 billion for the index. Conversely, if a stock has a $2 billion market cap but a 90% free float, it will contribute $1.8 billion to the index.
This is a common practice among most major global indices (such as the S&P 500, MSCI World, and FTSE 100). They use this methodology rather than total market cap weighting because it guarantees accurate market representation. It prevents companies with massive overall valuations but very few publicly traded shares from disproportionately swinging the index. It is also crucial for tradability: index funds and ETFs must buy shares in the exact proportion of the index, and including illiquid shares could negatively impact the fund’s performance.
Rebalancing and Concentration Limits
The ETF is rebalanced quarterly based on its “Parent Index”—the MSCI Brazil Index.
Both the ETF and the index have a strict market concentration policy that limits the weight of any single “group entity” (constituents that MSCI determines have a control relationship) to a maximum of 25% of the underlying index weight. Furthermore, the sum of all group entities with a weight above 5% cannot exceed an aggregate of 50% of the index weight.
To determine these “group entities,” MSCI analyzes the financial accounts of listed companies holding stakes of 20% or more in other listed companies to see if these stakes are controlling in nature.
Small-Cap Exclusion
The fund also excludes small caps. The methodology covers approximately 85% of the total free float-adjusted market capitalization of the Brazilian equity universe. The remaining 15% is covered by the EWZS (iShares MSCI Brazil Small-Cap ETF), which shares similar characteristics but focuses on smaller companies.
As a result of this methodology, the ETF typically holds a portfolio varying between 40 to 50 large- and mid-cap stocks.
What’s the Difference Between EWZ and IBOVESPA (B3: BOVA11)?
The IBOVESPA (IBOV), managed by the B3 exchange, is the primary benchmark index for the Brazilian stock market. While both IBOVESPA and EWZ cover mid- and large-cap companies tied to the Brazilian economy, they diverge significantly in their listing rules, which creates distinct differences in their asset composition.
1. The Geographic Listing Rule
- IBOVESPA: Only includes companies that are physically listed on the B3 exchange in Brazil.
- EWZ: Can include companies listed anywhere in the world (such as the NYSE or Nasdaq), provided they pass MSCI’s strict “economic proximity” rules. To qualify for EWZ while listed abroad, a company must satisfy one or two core criteria:
- The “Nerve Center”: The CEO, executive team, and board of directors must conduct their core decision-making inside Brazil.
- Revenue & Assets: The vast majority of the company’s revenue, operations, physical assets, and customer base must be derived from the Brazilian domestic market.
2. The Rise of Offshore Listings
In recent years, an increasing number of high-profile Brazilian corporations have bypassed or moved away from a sole local listing in favor of US exchanges to tap into deeper pools of global capital and capture higher tech valuations. Today, offshore-listed companies account for roughly 10% to 12% of the total market capitalization of all Brazilian equities.
Because of its rigid local-only rule, IBOVESPA completely misses these companies, whereas EWZ embraces them. Notable examples of US-listed players included in EWZ’s universe are:
- Digital Banking & Finance: Nu Holdings (NU), StoneCo (STNE), XP Investimentos (XP), PagBank (PAGS), and Inter (INTR).
3. The Dual-Listing Hybrid Strategy
Choosing a US exchange does not always mean abandoning the domestic market. Several Brazilian corporate giants pursue a dual-listing approach.
A prime example is the meat-processing giant JBS (JBS). When JBS pursued a US listing with a capitalization exceeding $14 billion, it strategically chose to remain dual-listed on the B3. This dual-structure allows a company to leverage global liquidity in the US while remaining perfectly eligible for both the local IBOVESPA index and foreign index funds like EWZ.
4. Sector Exposure & Small-Cap Exceptions
This structural difference heavily skews the sector weights of both funds. Because the US market has a much higher investment appetite for growth and innovation, foreign listings are dominated by technology, healthcare, and specialized mining companies.
- Tech & Health: Pioneers like health-tech firm Afya (AFYA) and e-commerce platform VTEX (VTEX) are listed exclusively in the US.
- Materials & Mining: Global commodity players like Sigma Lithium (SGML), which focuses on lithium processing in the Jequitinhonha Valley (MG), and Aura Minerals, a gold mining company with operations across the Americas.
Note on Small Caps: While giants like Nubank are massive enough to sit directly in the top holdings of EWZ, mid-sized or smaller foreign-listed companies (like Afya, VTEX, Sigma Lithium, and Aura Minerals) are currently excluded from EWZ due to size restrictions. Instead, they are captured by the EWZS (iShares MSCI Brazil Small-Cap ETF), which follows the exact same methodology but targets the smaller 15% of the market.
Main Sectors and Top Holdings
Because of the heavy reliance on commodities and banking in the Brazilian economy, the ETF is highly concentrated in a few key sectors.
Main Sectors
| Sector | Weight (%) |
|---|---|
| Financials | 35.18% |
| Energy | 16.45% |
| Materials | 14.95% |
| Utilities | 12.84% |
| Industrials | 8.35% |
| Consumer Staples | 5.83% |
| Consumer Discretionary | 2.38% |
| Communication | 2.05% |
| Health Care | 1.19% |
| Information Technology | 0.77% |
Top 10 Biggest Holdings
| Ticker | Company Name | Sector | Weight (%) |
|---|---|---|---|
| VALE3 | Vale S.A. | Materials | 11.58% |
| NU | Nu Holdings Ltd. (Nubank) | Financials | 8.60% |
| ITUB4 | Itaú Unibanco Holding S.A. | Financials | 8.42% |
| PETR4 | Petrobras (Preferred) | Energy | 7.33% |
| PETR3 | Petrobras (Common) | Energy | 6.77% |
| B3SA3 | B3 - Brasil Bolsa Balcão | Financials | 3.55% |
| BBDC4 | Banco Bradesco | Financials | 3.35% |
| ABEV3 | Ambev S.A. | Consumer Staples | 3.17% |
| WEGE3 | WEG S.A. | Industrials | 3.00% |
| SBSP3 | Sabesp | Utilities | 2.87% |
EWZ vs. FLBR
The Franklin FTSE Brazil ETF (FLBR) and EWZ are the two biggest passively managed US ETFs for Brazilian equities, but they have two main differences to consider when deciding between them:
- Composition:FLBR is composed only of stocks listed in Brazil, making it much more loyal to the local IBOVESPA (B3) index. Therefore, it lacks exposure to the newer tech and financial companies (like Nubank) that list exclusively in the US.
- Expenses & Fees:FLBR has a significantly lower Gross Expense Ratio (0.19% annually) compared to EWZ (0.59% annually). While EWZ offers higher liquidity and a broader representation of the true Brazilian corporate landscape, FLBR allows long-term investors to keep more of their returns due to its cheaper fee structure.
See also: Investing in the FLBR ETF: The Complete Guide
How Can I Invest in EWZ?
Most investors globally can access the NYSE Arca-listed EWZ, but some regions rely on localized versions for regulatory or tax reasons (such as UCITS compliance in the EU).
| Country / Region | Ticker | Exchange Accessed | Currency | Access Method & Fund Type |
|---|---|---|---|---|
| United States | EWZ | NYSE Arca | USD | Primary Native Listing (iShares MSCI Brazil ETF) |
| UK & European Union | IBZL / IDBZ | London Stock Exchange | GBP / USD | Localized Listing (European-compliant UCITS ETF) |
| Canada | EWZ | NYSE Arca | USD | Direct access to the US market via local brokers |
| Australia | EWZ | NYSE Arca | USD | Direct access to the US market via international brokers |
| New Zealand | EWZ | NYSE Arca | USD | Direct access to the US market via international brokers |
| India | EWZ | NYSE Arca | USD | Direct access to the US market (under LRS scheme) |
| Pakistan | EWZ | NYSE Arca | USD | Direct access via global brokerage platforms |
| Bangladesh | EWZ | NYSE Arca | USD | Direct access via global brokers (subject to central bank outward remittance rules) |
| Philippines | EWZ | NYSE Arca | USD | Direct access to the US market via international apps/banks |
| Nigeria | EWZ | NYSE Arca | USD | Direct access via global brokers (subject to local FX availability) |
| Singapore | EWZ or IDBZ | NYSE Arca or LSE | USD | Direct access to US or UK (UCITS often used for tax efficiency) |
| South Africa | EWZ or IDBZ | NYSE Arca or LSE | USD | Direct access to US or UK (UCITS often used for tax efficiency) |
Historic Performance & Dividend Yield
EWZ has a policy of paying out dividends twice a year, typically in June and December. Historically, EWZ—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 EWZ 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.
