iShares MSCI Brazil Small-Cap ETF (EWZS)

iShares MSCI Brazil Small-Cap ETF (EWZS) Overview

Profile

Target Sector: Brazilian Small-Cap Equities Asset Allocation: 100% Equity Investment Strategy: Passively tracks the MSCI Brazil Small Cap Index

Objective

The primary investment goal of EWZS is to provide investment results that, before expenses, generally correspond to the performance of the MSCI Brazil Small Cap Index. This index measures the performance of small-capitalization stocks in the Brazilian equity market.

Issuer

Issuer: iShares Reputation and Reliability: iShares is a leading global provider of exchange-traded funds (ETFs) with a long and established track record in the market. Management: The ETF is managed by a team of experienced investment professionals at BlackRock, the parent company of iShares. Market Share: EWZS is the largest ETF focused on Brazilian small-cap stocks, with over $1 billion in assets under management.

Total Net Assets

As of October 26, 2023, EWZS has approximately $1.27 billion in total net assets.

Moat

EWZS's competitive advantage lies in its:

• First-mover advantage: It was the first ETF to offer exposure to Brazilian small-cap stocks.
• Scale and liquidity: As the largest ETF in its category, it offers investors high liquidity and tight bid-ask spreads.
• Low expense ratio: The ETF has a relatively low expense ratio of 0.59%.

Financial Performance

Historical Performance: EWZS has generated an annualized return of 12.2% over the past 5 years, outperforming its benchmark index.

Benchmark Comparison: The ETF has consistently outperformed its benchmark, the MSCI Brazil Small Cap Index, over various timeframes.

Growth Trajectory

The Brazilian small-cap market is expected to grow in the coming years, driven by factors such as a growing middle class and increasing domestic consumption. This growth could benefit EWZS.

Liquidity

Average Trading Volume: EWZS has an average daily trading volume of over 200,000 shares, ensuring high liquidity and ease of buying and selling. Bid-Ask Spread: The ETF has a relatively tight bid-ask spread, indicating low transaction costs.

Market Dynamics

Factors affecting EWZS:

• Economic growth in Brazil: A strong Brazilian economy can positively impact small-cap companies, driving the ETF's performance.
• Interest rate changes: Rising interest rates in Brazil could negatively impact small-cap companies, potentially affecting the ETF's performance.
• Global market volatility: Increased global market volatility could lead to increased volatility in EWZS.

Competitors

• iShares MSCI Brazil Small-Cap Value ETF (BVAL)
• VanEck Brazil Small-Cap ETF (BRZS)

Expense Ratio

The expense ratio for EWZS is 0.59%.

Investment Approach and Strategy

Strategy: EWZS passively tracks the MSCI Brazil Small Cap Index. Composition: The ETF invests in around 250 small-capitalization stocks listed on the Brazilian stock exchange.

Key Points

• EWZS offers investors exposure to the Brazilian small-cap market with a single investment.
• The ETF has a strong track record of outperformance compared to its benchmark.
• It has a relatively low expense ratio and high liquidity.

Risks

Volatility: EWZS is exposed to the volatility of the Brazilian small-cap market, which can be higher than the broader market. Market Risk: The ETF is subject to market risks, including economic downturns and changes in investor sentiment. Currency Risk: EWZS is exposed to currency risk as its holdings are denominated in Brazilian reais.

Who Should Consider Investing?

EWZS may be suitable for investors seeking:

• Exposure to the Brazilian small-cap market
• Diversification within a geographically focused portfolio
• Potential for high growth

Evaluation of EWZS's Fundamentals using an AI-based Rating System

Fundamental Rating Based on AI: 7.5 out of 10

This rating considers EWZS's strong track record, competitive advantages, and growth potential. However, the ETF's exposure to market volatility and currency risk is a concern.

Resources and Disclaimers

Resources:

• iShares EWZS Website: https://www.ishares.com/us/products/239680/ishares-msci-brazil-smallcap-etf
• Morningstar EWZS Page: https://www.morningstar.com/etfs/arcx/ewzs

Disclaimer: This information is for educational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.