Most U.S.-listed emerging market ETFs have spent the past year treading water or losing ground. The iShares MSCI Brazil ETF (NYSEARCA:EWZ) has done the opposite. Shares are up 62% over the past year and have gained 18% in 2026 alone, making it one of the strongest-performing single-country equity funds available to U.S. investors right now.
The fund tracks the MSCI Brazil 25/50 Index and gives investors broad exposure to Brazil’s largest publicly traded companies. With roughly $9.7 billion in assets, an expense ratio of 0.59%, and a dividend yield near 5%, EWZ is the dominant vehicle for accessing Brazilian equities from a U.S. brokerage account. The portfolio is concentrated in three sectors: energy, materials, and financials. Vale, the iron ore mining giant, is the largest holding at 11%, followed by the fintech NU Holdings at 9% and Itau Unibanco at nearly 9%. Petrobras (NYSE:PBR), Brazil’s state-controlled oil producer, holds a combined weight 12% across its two share classes.
Sentiment around the fund has been broadly bullish. Options traders have consistently favored calls over puts, with call volume reaching as high as 86% of daily transactions during recent sessions. Institutional asset managers have taken notice as well. Mike Philbrick, CEO of ReSolve Asset Management, highlighted EWZ as a top pick in late February, pairing it with a base metals thesis that aligns closely with Vale (NYSE:VALE)’s dominant position in the fund.
The Macro Factor: Oil Prices and the Petrobras Effect
The single biggest macro driver for EWZ right now is crude oil. Petrobras contributes a large share of the fund’s weight, and its profitability is directly tied to global oil prices. The recent move in WTI crude has been dramatic: prices surged to $94.65 per barrel as of March 9, up 33% in a single week and 48% over the prior month. That kind of acceleration is a direct tailwind for Petrobras earnings and, by extension, EWZ’s net asset value.
Petrobras reported a strong 2025. Full-year net income came in at $19.63 billion, with oil and gas production growing 11% and Q4 exports reaching a record 1.2 million barrels per day. The board approved a special dividend payable in late March, and analysts at Goldman Sachs, UBS, Morgan Stanley, and JPMorgan have all raised price targets following the earnings release.
Investors can track WTI crude weekly through the EIA Weekly Petroleum Status Report, published every Wednesday. $70 $90
The Micro Factor: Vale’s Iron Ore Exposure and China Risk
Bank of America downgraded Vale to Neutral in early March, flagging a disconnect between the stock’s year-to-date rally 35% and a decline in iron ore prices $100. The bank argued the valuation had run ahead of the underlying commodity.
Vale’s Q4 results added complexity to that picture. A large nickel asset impairment and a deferred tax write-off pushed the company to a net loss for the quarter, masking what was otherwise solid operating momentum with EBITDA growing year over year. The headline loss creates near-term sentiment risk for EWZ given Vale’s weight in the fund.
Iron ore prices fell below $100 per ton in mid-February citing a mismatch between Vale’s 35% year-to-date stock rise and a 7% drop in iron ore prices. Q4 net loss of $3.84 billion, driven by a $3.5 billion nickel asset impairment and a $2.8 billion deferred tax write-off,
The legal picture adds another layer of complexity. New lawsuits related to overflow incidents at Minas Gerais sites have sought asset freezes exceeding 2 billion reais, and a case in the Netherlands is seeking roughly $3.8 billion in compensation tied to the 2015 Mariana dam collapse. These liabilities won’t resolve quickly, but they create headline risk that can move the stock and, with it, EWZ.
Investors can monitor Vale’s holdings weight and any index reconstitution notices through BlackRock’s iShares fund page, which publishes updated holdings files daily. China’s post-Lunar New Year steel output data, released monthly by the National Bureau of Statistics, is the clearest leading signal for where iron ore demand is heading.
What Comes Next
EWZ’s trajectory from here depends on whether the macro tailwinds that drove its recent surge can hold. Petrobras needs sustained oil price strength to maintain the earnings momentum that has made it a dividend engine for the fund. Vale needs Chinese steel demand to recover enough to justify a valuation that has already run well ahead of the underlying commodity ahead of its Q1 2026 earnings report. If both conditions hold, EWZ has a credible path to continued outperformance. But if either deteriorates sharply, it would remove the two pillars the rally has been built on.
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