Forget EWZ. Franklin’s Brazil Twin Charges Two-Thirds Less, and It’s Up 30% This Year

The iShares MSCI Brazil ETF (NYSEARCA:EWZ) is the reflex commercialized for U.S. investors seeking single-ticker vulnerability to Brazilian ample caps. It has been astir since 2000, tracks the MSCI Brazil 25/50 Index, and sits connected $88.51 cardinal successful assets, making it the deepest, astir liquid conveyance for the trade. EWZ holders ain it for a reason: wide vulnerability to Vale, Petrobras, Itau, and the remainder of the Bovespa heavyweights successful 1 enactment item. The question is whether they are paying a premium for that convenience erstwhile a near-identical alternate has softly done the aforesaid occupation cheaper and amended this year.

That alternate is the Franklin FTSE Brazil ETF (NYSEARCA:FLBR), which tracks the FTSE Brazil RIC Capped Index and holds the aforesaid names successful somewhat antithetic weights.

Where EWZ Falls Short

The disbursal ratio is 0.59%, per the iShares information expanse dated March 12, 2026. The alternate charges 0.19%. On a $10,000 position, that is simply a 40-basis-point yearly gap, oregon $40 a year, compounding for arsenic agelong arsenic the capitalist holds. For a state money that is fundamentally a wrapper astir the aforesaid 60 to 80 Brazilian ample caps, paying triple the interest for the iShares marque is the structural flaw.

The show spread successful 2026 makes the lawsuit harder to ignore. Year-to-date done July 13, 2026, FLBR is up 17.65% versus 12.46% for EWZ. Over the trailing year, FLBR returned 37.61% against EWZ's 34.44%. Same country, aforesaid names, astir 5 percent points of borderline YTD.

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The Advantage Mechanism

Two things thrust the gap. First is the interest itself, which is simply a imperishable headwind connected EWZ. Second is scale construction. FLBR's FTSE Brazil RIC Capped Index applies caps otherwise from MSCI's 25/50 methodology, resulting successful somewhat antithetic weightings for the aforesaid names. FLBR's apical position, Vale astatine 11.39%, is heavier than EWZ's Vale value of 9.94%. FLBR besides has nary vulnerability to Nu Holdings, which is 9.18% of EWZ, due to the fact that MSCI treats the Cayman-domiciled fintech arsenic Brazilian. FTSE does not. In 2026, tilting toward the mining and vigor heavyweights (VALE, PETR3, PETR4 combined astatine 27.60% of FLBR) has paid disconnected comparative to fintech exposure.