EWZ ETF Review: Is iShares Brazil ETF Worth Buying?

iShares MSCI Brazil ETF provides concentrated exposure to Latin America's largest economy — a commodity powerhouse exporting iron ore, soybeans, oil, and beef — making it a leveraged play on global commodity demand cycles and Chinese economic activity.

Last updated: 2026-02-02 · Data: Yahoo Finance, fund prospectuses, SEC filings

What Is EWZ?

The iShares MSCI Brazil ETF tracks large and mid-cap Brazilian stocks across sectors, providing broad exposure to South America's largest economy. Managed by BlackRock, this ETF follows the MSCI Brazil 25/50 Index, which includes companies like mining giant Vale, state oil producer Petrobras, and major Brazilian banks. Launched in 2000, EWZ remains the primary vehicle for accessing Brazilian equity markets from U.S. exchanges.

With a 0.59% expense ratio, $6.66 billion in assets under management, and a 5.18% dividend yield, EWZ offers direct exposure to an economy built on commodities, infrastructure, and domestic consumption.

Current Snapshot

Why It Matters for Real Asset Investors

Brazil represents the ultimate macro regime play — an economy where commodity cycles, currency debasement, and infrastructure needs converge. When global inflation accelerates or the dollar weakens, Brazil's resource-heavy economy often outperforms because its companies benefit directly from higher commodity prices and currency tailwinds.

EWZ serves as a leveraged bet on the Energy Macro thesis through multiple channels. Vale and Petrobras provide direct exposure to iron ore and oil — critical inputs for global infrastructure. The banking sector (Itau, Bradesco) benefits when Brazil's central bank cuts rates to stimulate growth. And the entire market gains when international investors flee developed market bonds for emerging market assets offering real yields.

The ETF struggles during dollar strength and global recession fears because Brazil's economy depends heavily on commodity exports and foreign investment flows. But when the macro regime shifts toward inflation, weak dollars, or infrastructure spending, Brazilian assets often lead global emerging markets higher.

Top Holdings

EWZ's top positions reveal Brazil's economic reality. Nu Holdings (12.2%) represents the new Brazil — a digital bank disrupting traditional finance with over 100 million customers. Vale (10.2%) remains the world's largest iron ore producer, essential for global steel production and infrastructure. Itau Unibanco (8.4%) and Banco Bradesco (3.5%) dominate Brazilian banking, benefiting from the country's high interest rate environment.

Petrobras (combined 10.2% across share classes) controls Brazil's oil production and refining, making it both an energy play and a government policy vehicle. Weg (3.4%) manufactures industrial equipment and electric motors, riding Brazil's infrastructure modernization. B3 (3.1%) operates Brazil's stock exchange, capturing trading volume as the economy develops. Sabesp (2.8%) provides water services to São Paulo, representing critical infrastructure investment.

How It Fits the Portfolio

EWZ works best as a tactical allocation within a broader emerging markets sleeve, sized at 2-5% of total portfolio depending on macro conditions. The ETF pairs naturally with commodity-focused positions because Brazil's economy amplifies global resource trends. When copper, iron ore, or oil prices rise, Brazilian companies often outperform the underlying commodities.

Consider EWZ when the Federal Reserve signals rate cuts, the dollar weakens against emerging market currencies, or global infrastructure spending accelerates. The position requires patience because Brazilian markets can be volatile, but the 5.18% dividend yield provides income while waiting for macro tailwinds.

Regime Signals

EWZ outperforms during Fed easing cycles because lower U.S. rates drive capital flows toward higher-yielding emerging markets. The ETF also benefits from dollar weakness — when the real strengthens, Brazilian assets become more valuable in dollar terms. Rising commodity prices create a double benefit: higher revenues for resource companies and improved terms of trade for the overall economy.

Conversely, EWZ underperforms during dollar strength, Fed tightening, or global growth scares. Brazilian assets are sensitive to foreign investor sentiment, making them vulnerable during risk-off periods. Watch copper and iron ore prices as leading indicators — when base metals rally, Brazilian stocks often follow within weeks.

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Frequently Asked Questions

Is EWZ a good investment for Brazil exposure?

EWZ is the most liquid and widely-traded Brazil ETF, providing one-click access to Brazilian equities including Vale (iron ore), Petrobras (oil), Itaú (banking), and WEG (industrial). Brazil's economy is deeply tied to commodity cycles — when commodity prices rise and China's economy is strong, EWZ tends to outperform significantly. However, Brazilian political risk, currency volatility, and fiscal concerns can create sharp drawdowns unrelated to commodity fundamentals.

What is the expense ratio of EWZ?

EWZ charges a 0.59% expense ratio, standard for a single-country emerging market ETF. The cost reflects the complexity of investing in Brazilian equities, including local custody, currency conversion, and tax withholding management. For the liquidity and convenience EWZ provides — including a very active options market — the fee is reasonable for tactical EM commodity exposure.

How does Brazil's real (BRL) affect EWZ returns?

EWZ returns are heavily influenced by the Brazilian real's exchange rate against the dollar. When the real weakens, EWZ's dollar-denominated returns decline even if underlying Brazilian stocks are flat or rising in local currency. Brazil's high interest rates, fiscal deficits, and political uncertainty create persistent currency volatility. Investors in EWZ are implicitly making a bet on both Brazilian equities and the real/dollar exchange rate.

How does EWZ fit into the Energy Macro framework?

Brazil is one of the world's most resource-rich countries, exporting the commodities that the Energy Macro thesis values: iron ore, crude oil, copper, soybeans, and beef. EWZ provides leveraged exposure to rising commodity demand from China and the developing world. Within Energy Macro, EWZ is a tactical position deployed when commodity cycles are favorable and Brazilian political risk is manageable — not a permanent core allocation.

For our complete allocation framework across real assets, infrastructure, and income strategies, see The Blackout Fortune Playbook.

Last updated: February 1, 2026 | Data: Yahoo Finance, iShares filings