FBZ: This Enhanced Product Is Flawed, More Sensible To Pursue EWZ

2025-05-13 07:15:43 ET

Summary

• The First Trust Brazil AlphaDEX Fund, a little-known ETF, has outperformed global stocks and emerging markets quite handsomely this year.
• FBZ employs an enhanced methodology which assigns priority to certain growth and value screeners.
• On further scrutiny, we find quite a few flaws in this product, and feel that the largest Brazilian ETF- EWZ has better qualities.
• FBZ's valuation backdrop and technical position don't support a buy either.

Solid Alpha In A Challenging Year

It has been well-documented that global equities- by and large- haven’t had the most conducive conditions to flourish in 2025. Well, a little-known ETF – The First Trust Brazil AlphaDEX Fund ( FBZ ), which covers around 50 stocks from Brazil, appears to have bucked the trend, delivering healthy returns of over 22% on a YTD basis. For context, this is around 16x better than what global stocks have delivered, and even 1.4x better than what emerging markets have delivered....

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