GET DAILY SIGNALSEWZ vs ILF: Weighing Pure Brazil Exposure Against Broader Latin America Diversification
Key Takeaways
- EWZ offers concentrated single-country exposure to Brazil, while ILF diversifies across five Latin American markets, reducing country-specific risk.
- ILF is meaningfully cheaper at a 0.47% expense ratio versus EWZ at 0.59%, an advantage that compounds over long holding periods.
- Both funds are heavily weighted to financials, materials, and energy, but EWZ carries higher Brazil fiscal and political concentration risk than ILF's regional mix.
- EWZ is the larger and more liquid vehicle, making it a preferred tool for tactical, high-turnover Brazil exposure.
- ILF's Mexico, Chile, and Peru sleeve adds exposure to copper, banking, and consumer franchises that EWZ does not capture.
- Tickeron AI Verdict: ILF is favored for its lower cost, broader diversification, and more balanced risk profile relative to EWZ.
Introduction
When evaluating emerging-market opportunities, the decision often comes down to single-country conviction versus regional diversification. The iShares MSCI Brazil ETF (EWZ) and the iShares Latin America 40 ETF (ILF) highlight that trade-off clearly. These ETFs do not compete head-to-head so much as they offer different ways to access Brazil's commodity- and financials-driven economy. EWZ provides pure-play Brazilian equities, while ILF blends Brazil with Mexico, Chile, Peru, and Colombia. With Brazil carrying significant weight in both, their performance tracks closely, yet differences in cost, diversification, and liquidity make this comparison relevant for investors managing emerging-market exposure.
iShares MSCI Brazil ETF (EWZ) Overview
EWZ tracks the MSCI Brazil 25/50 Index, a market-capitalization-weighted benchmark of large- and mid-cap Brazilian stocks. The fund holds about 55 positions and is non-diversified, which reflects the concentration typical of Brazil's equity market. It carries a 0.59% expense ratio and manages several billion dollars in assets, delivering strong liquidity and tight spreads. Sector weights emphasize financials at roughly 36%, energy near 19%, basic materials around 13%, utilities near 13%, and industrials near 11%. Top holdings include Nu Holdings (NU), Vale (VALE), Itaú Unibanco (ITUB), Petrobras (PBR), Banco Bradesco (BBD), B3, and WEG. This setup ties the fund closely to Brazilian interest rates, consumer credit, and global commodity demand, especially from China for iron ore.
iShares Latin America 40 ETF (ILF) Overview
ILF tracks the S&P Latin America 40 Index, which includes 40 of the largest and most liquid stocks across five Latin American markets. The fund holds approximately 45 to 51 positions and carries a lower 0.47% expense ratio. Its asset base is smaller than EWZ, yet it remains a liquid option for regional exposure. Geographically, Brazil accounts for about 59%, Mexico near 26%, Chile around 7%, with smaller allocations to Peru and Colombia. Sector weights feature financials at roughly 35%, basic materials near 20%, energy near 14%, consumer staples around 9%, and industrials near 9%. Top holdings overlap with EWZ—Nu Holdings, Vale, Itaú Unibanco, and Petrobras—but also include Mexican names such as Grupo México and Grupo Financiero Banorte, plus Credicorp (BAP) of Peru and América Móvil of Mexico. This broader mix extends exposure beyond Brazil's domestic economy.
Industry and Thematic Backdrop
Both ETFs sit at the intersection of macro forces affecting Latin American equities. Commodity prices, particularly iron ore, copper, and crude oil, drive performance given the heavy materials and energy allocations. Monetary policy cycles in Brazil and Mexico shape the financials sleeve through lending margins and credit demand. China's economic path remains a key external factor for regional exporters. Brazilian fiscal policy and political developments introduce single-country volatility that hits EWZ more directly. ILF offers some buffer through its Mexican, Chilean, and Peruvian holdings, which follow distinct cycles, provide copper exposure, and operate under different regulatory settings. The regional diversification in ILF can serve as a partial hedge against Brazil-specific drawdowns while preserving commodity leverage.
Performance and Positioning Comparison
Over recent periods, both funds have moved largely in tandem due to Brazil's dominant share and the shared emphasis on financials and commodity producers. Relative performance has been influenced by Brazil's currency, fiscal, and rate environment, where EWZ's pure exposure amplifies both gains and corrections. ILF's Mexico sleeve has at times provided offsetting returns and modestly lower volatility. From a risk perspective, EWZ shows higher concentration and greater sensitivity to Brazilian politics and the real's moves, while ILF trades some single-country beta for lower cost and broader diversification. Earnings cycles of shared holdings such as Nu Holdings, Vale, and Petrobras influence returns in both. Investors seeking maximum Brazil beta may lean toward EWZ, whereas those prioritizing cost efficiency and regional balance may prefer ILF's structure across cycles.
Using Tickeron AI Tools in Research
When comparing ETFs like these, I often run a quick screen with Tickeron's AI Screener to review technical patterns, fundamentals, and relative performance metrics. The tool lets me filter across industries and volatility measures more efficiently than manual checks, helping confirm whether the cost and diversification advantages in ILF align with current market conditions. It has become a regular part of my process for spotting setups in emerging-market vehicles.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
EWZ in downward trend: price dove below 50-day moving average on October 26, 2026
EWZ moved below its 50-day moving average on October 26, 2026 date and that indicates a change from an upward trend to a downward trend. In 41 of 46 similar past instances, the stock price decreased further within the following month. The odds of a continued downward trend are 89%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 22, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on EWZ as a result. In 64 of 80 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 80%.
The Moving Average Convergence Divergence Histogram (MACD) for EWZ turned negative on October 21, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 47 similar instances when the indicator turned negative. In 40 of the 47 cases the stock turned lower in the days that followed. This puts the odds of success at 85%.
The 10-day moving average for EWZ crossed bearishly below the 50-day moving average on October 30, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 12 of 17 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 71%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where EWZ declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 87%.
The Aroon Indicator for EWZ entered a downward trend on November 04, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator shows that the ticker has stayed in the oversold zone for 9 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an Uptrend is expected.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 7 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +2.65% 3-day Advance, the price is estimated to grow further. Considering data from situations where EWZ advanced for three days, in 277 of 314 cases, the price rose further within the following month. The odds of a continued upward trend are 88%.
EWZ may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
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