EWZ: 2 Reasons Why I Don't Own This ETF

2025-05-30 05:34:33 ET

Summary

• iShares MSCI Brazil ETF underperforms its top holdings due to index concentration and inclusion of underperforming stocks, making it less attractive long-term.
• Stock picking in Brazil offers better risk/reward by focusing on quality companies and avoiding structurally weak or overvalued names.
• I rate EWZ as 'hold'—it's practical for basic EM exposure, but direct stock selection is preferable for those familiar with the market.

I believe that ETF investing is very useful for many investors, as it removes complexity, increases diversification, and is often efficient in terms of expenses and even taxes. In Brazil, I am also optimistic about this industry. There is still a lot of room for growth and new ETFs to emerge. The level of maturity is completely different when compared to the US....

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