The iShares MSCI Brazil ETF (EWZ) has gained +15.96% year-to-date as of March 27, 2026, making it the second-best performing country ETF in the universe after South Korea and one of the most analytically interesting equity stories of the current macro regime. While most investors have focused on Norway as the canonical energy exporter beneficiary of the Iran war, Brazil has quietly assembled the same structural advantages — commodity export intensity, geographic distance from the conflict, and a currency that strengthens when oil rises — without the narrative crowding that has made ENOR a consensus trade.

According to Country ETF Tracker data, EWZ gained +5.08% in the week of March 20–27 alone — the second-best weekly return in the country ETF universe, trailing only the iShares MSCI Latin America 40 ETF (ILF) at +4.71%. The weekly outperformance coincided with Brazil's Ibovespa crossing 185,000 for the first time as ceasefire optimism lifted commodity prices and Petrobras surged on Brent above $100. Guru Focus reported two weeks ago that "Petrobras leads iShares MSCI Brazil ETF surge" as EWZ's commodity-driven rally has run nearly uninterrupted since the war began on February 27.

This review covers EWZ's portfolio structure, the specific holdings driving returns, Brazil's commodity export position, valuation, seasonality and what the ceasefire probability curve means for the duration of the current trade.

What Is the iShares MSCI Brazil ETF (EWZ)

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The iShares MSCI Brazil ETF (EWZ) tracks the MSCI Brazil 25/50 Index, providing exposure to large- and mid-cap Brazilian equities listed on the B3 exchange in São Paulo. Managed by BlackRock with an expense ratio of 0.59%, the fund holds 52 securities and is the world's largest single-country emerging market ETF with $9.5 billion in assets under management.

Brazil is the world's second-largest iron ore exporter, the largest soybean exporter, the fourth-largest crude oil producer in the Western Hemisphere through Petrobras, and one of the world's largest exporters of beef, coffee and sugar. When commodity prices rise — as they have done across energy and materials since February 27 — Brazil's export revenues expand, the real strengthens, and the equity market re-rates to reflect higher corporate cash flows. The mechanism is not subtle; it is the most direct commodity-to-equity transmission mechanism available in the emerging market universe.

Key Fact

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EWZ Performance: The Stealth Winner of the Iran Wa

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EWZ's +15.96% YTD return is the second-highest in the country ETF universe, but the framing of it as a pre-war story misses the more interesting dynamic: EWZ has continued to compound positive returns through the war period, unlike South Korea's EWY, which surged +35% before the war and then reversed hard. EWZ's gains are stacking, not mean-reverting.

The contrast with other commodity plays in the universe is illuminating:

Brazil outperforms Saudi Arabia on a YTD basis for a structural reason that maps directly to geography: Saudi Arabia is constrained by Hormuz and cannot fully deliver its oil to market. Brazil's deepwater pre-salt fields in the Santos and Campos Basins are thousands of miles from the conflict, operated by Petrobras and exported via Atlantic Ocean routes with zero Hormuz exposure. Like Norway, Brazil is a commodity exporter with geographic insulation. Unlike Norway, Brazil is also an agricultural commodity exporter — meaning it benefits from a broader commodity price upswing rather than just the energy component.

Top Holdings: The Portfolio Behind the Return

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EWZ holds 52 securities with the top five positions accounting for approximately 43% of total weight.

Petrobras combined (14.64%) is EWZ's most direct oil price lever. The state-controlled energy company operates the world's largest deepwater oil reserves, producing approximately 2.7 million barrels per day. When Brent trades above $100, Petrobras's upstream earnings expand mechanically — every dollar above its operating breakeven (~$35/bbl offshore) falls directly to free cash flow. Petrobras has historically paid large special dividends in high-oil-price environments, which partially explains EWZ's 4.46% dividend yield relative to the universe average.

Vale (10.15%) is EWZ's other structural commodity anchor. Iron ore is Vale's primary product, and the company produces approximately 300 million tonnes per year from its Carajás mines in northern Brazil. Ceasefire optimism and the prospect of global industrial activity recovering has been supportive for iron ore prices this week — contributing to the +2% Ibovespa move that Invezz reported on Wednesday.

Nubank (9.19%) is the portfolio's most distinctive holding and its primary idiosyncratic growth driver. The Cayman Islands-incorporated digital bank — listed as NU on NYSE and held through EWZ's MSCI-eligible structure — serves over 100 million customers across Brazil, Mexico and Colombia. Nubank's inclusion at nearly 10% makes EWZ unusual among commodity-heavy emerging market ETFs: it combines deepwater oil, iron ore and a global-scale fintech in a single 52-stock portfolio.

Macro Drivers: Why Brazil Works in Both War and Peac

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Brazil's outperformance in 2026 reflects a structural position that is robust to multiple macro scenarios rather than dependent on a single factor — which is analytically different from Norway's more binary oil-war trade.

If the Iran war continues: Brent stays above $100, Petrobras generates exceptional free cash flow, Vale benefits from sustained infrastructure spending, and the commodity export complex maintains elevated revenues. EWZ continues to compound.

If a ceasefire occurs: Oil prices fall moderately from $100+ levels, but the Ibovespa data already shows EWZ's sensitivity to ceasefire optimism as a positive catalyst. Brazil's Ibovespa jumped nearly 2% on Wednesday, March 26, on ceasefire news from NPR — suggesting that a resolution accelerates Brazil's domestic growth story without necessarily impairing the commodity export baseline. Brazil's real strengthens on global risk appetite recovery, providing an additional tailwind for USD-denominated EWZ holders.

Reuters reported on March 19 that the "mideast crisis puts Asia's earnings boom to the test" — but Brazil is not in Asia and does not share Asia's energy import structure. For EWZ, the Iran war has been additive regardless of duration, which is a materially different risk profile from either the pure oil plays (ENOR, KSA) or the energy importer casualties (EWY, EIDO, EZA).

Valuation: The Deepest Discount Among Top Performer

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EWZ trades at 10.47x forward P/E — a 44.4% discount to the MSCI ACWI at 18.83x and the steepest valuation discount of any top-performing country ETF in the universe. The combination of +15.96% YTD performance and 10.47x forward P/E is analytically unusual: the fund has delivered strong returns while simultaneously becoming relatively cheaper as earnings growth has outpaced multiple expansion.

The 4.46% dividend yield at $36.84 reflects Petrobras's high payout policy and the broader Brazilian corporate tendency toward generous distributions. For investors holding EWZ as part of a diversified country ETF portfolio, the dividend provides meaningful carry during holding periods between commodity price cycles.

Seasonality: April and July Are EWZ's Strongest Month

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EWZ's 20-year seasonality data shows a calendar that favours the current holding period. April averages +2.45% with a 63% win rate — the fund's strongest month by average return over the available data. The combination of April seasonal support and a macro environment where commodity prices remain elevated heading into Q2 creates a compounding tailwind for the near-term.

July is EWZ's second-strongest month by win rate at 70% — the highest monthly win rate in the fund's seasonal calendar. The June-July window is also where Polymarket prices the ceasefire probability above 57% — suggesting that the scenario where the Iran war ends coincides with one of EWZ's seasonally strongest periods.

EWZ's worst seasonal month is June at -1.20% average — the same month where ENOR's seasonal calendar also turns negative. The convergence of seasonal headwinds in June for both commodity ETFs, combined with rising ceasefire probability, identifies June as the natural review point for the current commodity trade.

Key Risk

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China demand risk is the primary structural headwind for Vale. Chinese iron ore imports depend on Chinese construction and infrastructure activity, which has been under pressure from the property sector deleveraging ongoing since 2022. Any sustained weakness in Chinese steel demand would impair Vale's earnings regardless of what happens in the Middle East.

Brazilian political and fiscal risk remains an embedded discount in EWZ's valuation. President Lula's government has intervened in Petrobras's dividend policy previously, and fiscal concerns about Brazil's debt-to-GDP trajectory have been a persistent source of multiple compression. The 10.47x forward P/E is partly a political risk discount that does not disappear in a commodity bull market.

Currency risk: EWZ's returns are denominated in USD but generated from BRL-priced assets. A weakening real — driven by domestic fiscal deterioration or broader emerging market risk-off — would impair dollar returns even in a rising commodity price environment.

Conclusio

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The iShares MSCI Brazil ETF (EWZ) at $36.84 and +15.96% YTD is the best-positioned commodity-exporting country ETF for the current macro regime — and the most durable, because its commodity basket (oil, iron ore, agriculture) is broader than Norway's oil-and-gas-only exposure. At 10.47x forward P/E and 4.46% dividend yield, the valuation provides a margin of safety that the market leadership position does not typically afford.

The ceasefire probability curve that defines the exit window for ENOR actually represents a positive scenario for EWZ's domestic growth engine: a resolution of the Iran conflict would lower energy costs for Brazilian consumers and businesses, strengthen the real on global risk appetite, and accelerate the domestic credit cycle that Nubank and Itaú capture. EWZ is, unusually, one of the few country ETFs where the ceasefire scenario is also constructive.

Track EWZ live and compare it against ENOR, KSA and SPY from February 27 at countryetftracker.com. Full valuation and seasonality data at countryetftracker.com/valuation and countryetftracker.com/seasonality.

Frequently Asked Question

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Why is EWZ outperforming in 2026?

Brazil is a major oil, iron ore and agricultural commodity exporter with zero Hormuz exposure. Petrobras (combined 14.64% of EWZ) generates exceptional free cash flow when Brent trades above $100, Vale (10.15%) benefits from elevated materials prices, and the real strengthens in commodity bull markets. EWZ combines the energy exporter tailwind of Norway with the broader commodity basket of a diversified resource economy.

What are EWZ's top holdings?

Vale (10.15%), Nubank (9.19%), Itaú Unibanco (8.43%), Petrobras PN (7.67%) and Petrobras ON (6.97%) are the five largest positions. Petrobras's combined ~14.64% weight makes it the fund's dominant oil price lever.

What is EWZ's valuation and dividend yield?

EWZ trades at 10.47x forward P/E — a 44.4% discount to the MSCI ACWI — and offers a 4.46% dividend yield at $36.84. It is one of the cheapest top-performing country ETFs in the universe.

Does EWZ benefit from a ceasefire as well as from the war continuing?

Yes. If the war continues, Petrobras and Vale benefit from sustained commodity prices. If a ceasefire occurs, the Ibovespa data (up ~2% on ceasefire news this week) suggests a positive domestic growth re-rating as energy costs fall, the real strengthens and credit conditions ease. EWZ's risk profile is unusually symmetric relative to other commodity ETFs.