Why is ewz down

Content on WhatAnswers is provided "as is" for informational purposes. While we strive for accuracy, we make no guarantees. Content is AI-assisted and should not be used as professional advice.

Last updated: April 8, 2026

Quick Answer: EWZ, the iShares MSCI Brazil ETF, experienced a decline of approximately 15% in the first half of 2023 due to a combination of factors including political uncertainty, economic challenges, and global market conditions. The ETF's performance is closely tied to Brazil's economy, which faced inflation rates above 6% and interest rates at 13.75% in early 2023. Additionally, concerns about fiscal policies and slower growth in China, a key trading partner, contributed to investor caution.

Key Facts

EWZ tracks the MSCI Brazil 25/50 Index, which includes 85 Brazilian stocks as of 2023.
Brazil's GDP growth slowed to 0.9% in Q1 2023, impacting EWZ's performance.
The Brazilian real depreciated by over 5% against the U.S. dollar in early 2023, affecting ETF returns for U.S. investors.
EWZ has an expense ratio of 0.59% and manages over $5 billion in assets as of 2023.
Political events, such as the 2022 presidential election, increased volatility, with EWZ dropping 10% in the month following the election.

Overview

EWZ, or the iShares MSCI Brazil ETF, is an exchange-traded fund launched by BlackRock in 2000 that provides investors with exposure to Brazilian equities. It tracks the MSCI Brazil 25/50 Index, which includes large and mid-cap companies listed on the Brazilian stock exchange, representing about 85% of the Brazilian equity market. As of 2023, EWZ holds around 85 stocks, with major sectors including financials (about 25%), materials (20%), and energy (15%). The ETF has become a popular tool for international investors seeking to invest in Brazil's economy, which is the largest in Latin America with a GDP of approximately $1.9 trillion in 2022. Historically, EWZ has experienced significant volatility, influenced by Brazil's economic cycles, political shifts, and commodity prices, with notable drops during events like the 2015-2016 recession and the COVID-19 pandemic in 2020.

How It Works

EWZ operates by pooling investor funds to purchase a portfolio of Brazilian stocks that mirror the MSCI Brazil 25/50 Index, using a passive investment strategy. The index is weighted by market capitalization, with adjustments to ensure no single stock exceeds 25% of the index and the top five stocks do not exceed 50%, reducing concentration risk. The ETF trades on U.S. exchanges like the NYSE Arca, allowing investors to buy and sell shares throughout the trading day at market prices. Its performance is affected by factors such as Brazil's economic indicators (e.g., GDP growth, inflation, and interest rates), political stability, and global demand for commodities like iron ore and soybeans, which are key exports. Additionally, currency fluctuations between the Brazilian real and the U.S. dollar impact returns, as EWZ is denominated in dollars but holds assets in reais.

Why It Matters

EWZ matters because it serves as a barometer for Brazil's economic health and provides diversification for global investors. Its performance reflects broader trends in emerging markets, influencing investment decisions and capital flows. For individual investors, EWZ offers an accessible way to gain exposure to Brazil's growth potential without direct stock-picking, though it carries risks like political instability and currency volatility. In real-world terms, declines in EWZ can signal economic challenges in Brazil, affecting trade, foreign investment, and local businesses. Understanding EWZ's movements helps investors assess risks in emerging markets and make informed portfolio adjustments, contributing to financial literacy and market stability.