EWZ - EWZS: High Risk High Reward

2024-06-12 13:23:06 ET

Summary

• EWZS provides exposure to Brazilian small-cap stocks, offering diversification across various segments with differing risk profiles.
• The current valuation of EWZS suggests it is undervalued, presenting an opportunity for potential appreciation amid improving macroeconomic conditions.
• Risks include domestic macroeconomic scenario, fiscal policy uncertainty, and potential impact of tighter monetary policies on company profits.

There are various ways of gaining exposure to Brazilian companies, the main one being through the iShares MSCI Brazil ETF ( EWZ ), which includes the country's main companies, most of which are commodities and banks, such as Vale ( VALE ), Petrobras ( PBR ), Itau Unibanco ( ITUB ) and others. However, the way we'll be dealing with this article is through the iShares MSCI Brazil Small-Cap ETF (EWZS), which is exposed to Brazilian small-cap stocks....

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