These 3 Funds Can Help You Bet on Brazil's Rally

Brazilian stocks closed at record highs Wednesday after an appeals court unanimously upheld a graft sentence against former President Luiz Inacio Lula da Silva. With some investors calling for a prolonged rally, here are three exchange-traded funds that offer different strategies for playing the market:

Brazil ETFs

  • iShares MSCI Brazil ETF (ticker EWZ), which has almost $9 billion in assets, tracks mid- and large-cap companies representing 85% of the Brazilian stock market
    • EWZ has climbed more than 9% over the past two days to its highest intraday levels since October 2014; the fund rose 21% in 2017, outperforming the S&P 500 (+19%)
    • The top holdings among EWZ’s 55 members are Itau Unibanco Holding SA (12.4%), Vale SA (10%), Banco Bradesco SA (9.1%) and Ambev SA (7.8%) 
    • About 28% of the fund’s exposure is in banks; 12% is in iron and steel; 8% is in beverages
  • VanEck Vectors Brazil Small-Cap ETF (ticker BRF), has $121 million in assets and tracks small-cap Brazilian equities
    • BRF has climbed almost 8% over the past two days but is still trading below October’s intraday peak
    • The top holdings among BRF’s 58 members are CVC Brasil Operadora e Agencia (5.9%), Odontoprev (3.9%), MRV Engenharia e Participacoes (3.6%) and Smiles Fidelidade (3.6%)
    • About 9.7% of the fund’s exposure is in electric; 9.1% is in real estate
  • Franklin FTSE Brazil ETF (ticker FLBR), has $17.1 million in assets and is up 17% since its launch in November
    • The top holdings among FLBR’s 74 members are Itau Unibanco (11.2%), Vale (9.5%), Banco Bradesco (8.6%) and Ambev (6.8%)
    • About 26% of the fund’s exposure is in banks; 13% is in oil and gas; 11% is in iron and steel
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