EWZ — iShares MSCI Brazil ETF
Price when we picked it (Aug 21, 2026)
$34.44
P/E Ratio
9.7
P/E Forward
—
Dividend
3.86%
Market Cap
$7.82B
EPS
—
Consensus
ETF — index basket (no individual rating)
What they do
EWZ replicates the MSCI Brazil 25-50 index: 67 listed Brazilian companies, with caps that prevent excessive concentration in any single name. The top 10 concentrates ~59%: Nu Holdings 10.49% (a fully digital bank, the largest neobank in the Western world), Vale 9.75% (iron, nickel and copper mining — a key supplier to global steelmaking), Itaú Unibanco 7.96% (Latin America's largest private bank), Petrobras 6.89% + 6.53% across its two classes (state oil company, one of the world's biggest dividend payers when crude is high), Banco Bradesco 3.64%, WEG 3.29% (a maker of motors and electrical equipment with global reach), B3 3.19% (the Brazilian stock exchange) and AXIA Energia 3.11%. It is a faithful snapshot of listed Brazil: banks, commodities, energy and industry. It manages $7.82 billion, charges 0.59% a year and pays ~3.86% in dividends.
Why we like it
Three reasons.
- VALUATION: a 9.68 P/E — the Brazilian market trades at a fraction of the US multiple for companies that are genuine leaders in their industries (Vale in iron ore, Itaú in Latin American banking, WEG in electric motors, Nu in digital banking). It is one of the cheapest large markets in the world.
- THE HIGHEST DIVIDEND IN THE PORTFOLIO: 3.86% a year. Brazil has a corporate culture of distributing profits — it is even tax-incentivized — and when oil and iron ore are high, Petrobras and Vale become dividend machines.
- THE RATE CYCLE: the Selic rate sits at 14% and the central bank has already started cutting. Historically, Brazil's rate-cutting cycle is the best fuel for its stock market: the cost of money falls, fixed income stops competing with equities and foreign capital returns. We are buying with the basket ~18% below its 52-week high, after a year of +32.6%. It also diversifies for real: it is our first exposure to Latin America and to a market driven by commodities, not technology.
Key Risk
#1: the dividend is NOT stable and it must be said clearly. The 3.86% yield depends on Petrobras and Vale, and both pay according to the price of oil and iron ore — when crude falls below $60, Petrobras cuts; when iron ore weakens, Vale does too. These are not US dividend aristocrats raising the payout every year no matter what: here the coupon rises and falls with the commodity. Other risks:
- political and electoral risk: Brazil has a history of state intervention in Petrobras (fuel prices set by politics, not the market) and electoral cycles move the market violently;
- currency risk: it trades in dollars but everything inside is in reais — if the real weakens, your dollar return erodes even if the stocks rise;
- commodity concentration: Vale + Petrobras are ~23% of the basket; a global recession that sinks iron ore and crude hits twice;
- rates still high: a 14% Selic is still restrictive — if inflation proves sticky, the cuts stop and the thesis is delayed;
- it is an emerging market: more volatile than anything else we own, with capital flows that rush in and out.
This is educational and informational content, not financial advice. Always consult a qualified financial advisor before making investment decisions.
Vectorial Data picked EWZ on Aug 21, 2026 at $34.44.
Full Research
What it is. EWZ (iShares MSCI Brazil ETF, BlackRock) replicates the MSCI Brazil 25-50 index: 67 listed Brazilian companies covering the full market-cap spectrum, with capping rules to avoid excessive concentration. Assets $7.82 billion, 0.59% annual fee, 3.86% dividend yield, basket P/E of 9.68. It is the standard vehicle for owning Brazil from a dollar account.\n\nWhat's inside. Top 10 ≈ 59%: Nu Holdings 10.49%, Vale 9.75%, Itaú Unibanco 7.96%, Petrobras 6.89% (PETR4) + 6.53% (PETR3) = 13.42% combined, cash in reais 4.24%, Banco Bradesco 3.64%, WEG 3.29%, B3 3.19% and AXIA Energia 3.11%. The composition tells the story of the Brazilian economy: banking (Nu, Itaú, Bradesco, B3 ≈ 25%), commodities and energy (Vale, Petrobras ≈ 23%) and export industry (WEG). Nu Holdings deserves its own note: it is the largest digital bank in the world outside China, with over 100 million customers across Brazil, Mexico and Colombia, and today it is the index's biggest position — a sign of how much the composition of the Brazilian market has changed in a decade.\n\nThe valuation thesis. A 9.68 P/E for a basket that includes Latin America's largest private bank, one of the planet's biggest iron-ore miners and an electric-motor manufacturer with global customers. It is a fraction of the US market multiple. The emerging-market discount is structural and has legitimate reasons (political risk, currency, governance), but at these levels it already prices in plenty of pessimism.\n\nThe rate cycle — the catalyst. Brazil's monetary policy committee cut the Selic rate to 14% from 14.25%, signaling that uncertainty around its inflation projections remains higher than usual. The key point is not the cut itself, it is the direction: in Brazil, with double-digit rates, fixed income competes fiercely against equities; when the cycle turns lower, local capital rotates from bonds into stocks and foreign money returns. Historically that turn has been the best predictor of Brazilian equity performance.\n\nThe dividend — with the warning up front. A 3.86% yield is the highest in our portfolio, but its nature differs from a US company raising its dividend for 50 straight years. EWZ's distributions depend on Petrobras and Vale: when oil holds above $80 and iron ore is firm, Petrobras becomes a dividend machine; when crude falls below $60, it cuts. Recent payments illustrate the volatility: $0.52 in June 2025, $1.03 in December 2025 and a $0.11 reconciliation in January 2026. It is real income but irregular — it should not be budgeted like fixed income.\n\nPrice and timing. 12-month return +32.56% with dividends; 52-week range $27.48-$42.02; our $34.44 entry sits ~18% below the high. We are buying after a correction inside an uptrend, with the rate catalyst only just beginning.\n\nIn the portfolio. Fourth country ETF (after Korea, China and Taiwan) and the FIRST outside Asia: it adds Latin America, commodities and banking to a portfolio with a strong technology tilt, and contributes the highest dividend yield we own. The risks — politics, currency, commodity dependence — are real and sit at the top of the thesis, not hidden at the end.
This is not financial advice. Consult a certified financial advisor.
The author may hold positions in the securities discussed.
Past performance does not guarantee future results.