EWZS Profile
The iShares MSCI Brazil Small-Cap ETF is designed to track the investment results of the MSCI Brazil Small Cap Index, a free float-adjusted market capitalization-weighted index. This index focuses on measuring the performance of small-capitalization companies listed on stock exchanges in Brazil, providing investors with targeted exposure to the more dynamic and growth-oriented segments of the Brazilian equity market. The fund aims to replicate the performance of the index by investing at least 80% of its assets in the component securities of the index and in investments that exhibit economic characteristics substantially identical to those of the index components.
Small-cap companies in Brazil represent a critical segment of the economy, often characterized by higher growth potential compared to larger, more established firms. The iShares MSCI Brazil Small-Cap ETF offers investors diversified access to these smaller companies, which can be integral to Brazil's economic development, especially in sectors such as consumer goods, industrials, and financials. These companies, though smaller in size, play a significant role in the domestic market and can offer unique investment opportunities due to their potential for rapid expansion.
By investing in the iShares MSCI Brazil Small-Cap ETF, investors can gain exposure to a broad range of small-cap Brazilian equities, which are typically underrepresented in broader market indices. This ETF provides a way to capture the growth potential of emerging companies in Brazil, which may benefit from local economic trends, innovations, and changes in consumer behavior. The focus on small-cap stocks allows investors to tap into the more volatile but potentially higher-reward segments of the Brazilian market, making this ETF an attractive option for those looking to enhance their portfolio with growth-oriented investments.
As a non-diversified fund, the iShares MSCI Brazil Small-Cap ETF is concentrated in a specific geographic region and market segment, which means it carries unique risks associated with the Brazilian economy and the inherent volatility of small-cap stocks. While this concentration can offer substantial upside potential, it also exposes investors to greater risks, including economic fluctuations, political instability, and changes in market conditions specific to Brazil. Investors seeking to capitalize on the growth prospects of Brazil’s small-cap companies may find this ETF particularly appealing, though they should be mindful of the heightened risks associated with such a focused investment strategy.
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