FLBR charges 0.19% versus EWZ's 0.59% and has outperformed by roughly 5 percentage points year-to-date in 2026.
FLBR excludes Nu Holdings and runs heavier exposure to Vale and Petrobras, a construction difference that has driven its 2026 edge.
Taxable EWZ holders with large embedded gains may need years to recover from switching, given the capital gains tax hit of 15 to 20 percent.
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The iShares MSCI Brazil ETF (NYSEARCA:EWZ) is the reflex trade for U.S. investors seeking single-ticker exposure to Brazilian large caps. It has been around since 2000, tracks the MSCI Brazil 25/50 Index, and sits on $88.51 billion in assets, making it the deepest, most liquid vehicle for the trade. EWZ holders own it for a reason: broad exposure to Vale, Petrobras, Itau, and the rest of the Bovespa heavyweights in one line item. The question is whether they are paying a premium for that convenience when a near-identical alternative has quietly done the same job cheaper and better this year.
That alternative is the Franklin FTSE Brazil ETF (NYSEARCA:FLBR), which tracks the FTSE Brazil RIC Capped Index and holds the same names in slightly different weights.
The expense ratio is 0.59%, per the iShares fact sheet dated March 12, 2026. The alternative charges 0.19%. On a $10,000 position, that is a 40-basis-point annual gap, or $40 a year, compounding for as long as the investor holds. For a country fund that is essentially a wrapper around the same 60 to 80 Brazilian large caps, paying triple the fee for the iShares brand is the structural flaw.
The performance gap in 2026 makes the case harder to ignore. Year-to-date through 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, same names, roughly five percentage points of edge YTD.
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Two things drive the gap. First is the fee itself, which is a permanent headwind on EWZ. Second is index construction. FLBR's FTSE Brazil RIC Capped Index applies caps differently from MSCI's 25/50 methodology, resulting in slightly different weightings for the same names. FLBR's top position, Vale at 11.39%, is heavier than EWZ's Vale weight of 9.94%. FLBR also has no exposure to Nu Holdings, which is 9.18% of EWZ, because MSCI treats the Cayman-domiciled fintech as Brazilian. FTSE does not. In 2026, tilting toward the mining and energy heavyweights (VALE, PETR3, PETR4 combined at 27.60% of FLBR) has paid off relative to fintech exposure.
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