Leading the Market Rally! Brazil ETF Suddenly Surges, Up Over 18% This Year

On March 24, the market overall rebounded. According to Wind data, among the top ten ETFs by increase, besides gold stocks ETF, the Brazil cross-border ETF E Fund (520870) also ranked fifth, closing up 5.5%. Another Brazil-focused ETF in the A-share market, Huaxia (159100), also gained 3.86% that day.

It is worth noting that since the beginning of this year, these two funds have increased by 18.07% and 18.42%, respectively, making them among the top five cross-border ETFs in terms of growth.

Brazil ETFs Perform Well

As a new cross-border ETF launched in November 2025, the first batch of Brazil ETFs was issued by E Fund and Huaxia Fund, tracking the Ibovespa index managed by well-known Brazilian asset management companies.

Ibovespa reflects the overall performance of the most liquid and largest market capitalization stocks on the Brazilian stock exchange. Compared to the CSI 300 index, the Ibovespa has a higher concentration of its top ten constituents—over 50% combined weight—and a higher proportion of resource-based companies.

The index covers several key sectors where Brazil has a competitive advantage internationally, including Vale, one of the world’s largest iron ore producers, and state-owned energy giant Petrobras; the financial sector also has a high weight, including major financial institutions like Banco do Brasil and Bradesco.

Specifically, on March 24, E Fund’s Brazil ETF had a trading volume of 485 million yuan, an increase of 318 million yuan from the previous trading day, a 190.22% increase. Huaxia’s Brazil ETF traded 362 million yuan, up 195 million yuan from the previous day, a 116.47% increase.

As of March 23, E Fund’s Brazil ETF had a scale of 516 million yuan, and Huaxia’s was 423 million yuan.

Institutions Optimistic About Brazil’s Stock Market in 2026

Brazil’s stock market experienced a bull run in 2025, and the upward trend is expected to continue into 2026. In February, the Ibovespa index hit a record high of 192,623.56 points.

“Brazil’s recent strength may be related to the global rise in resource commodities driven by the Middle East conflict,” analyzed a metals fund manager in South China. “Brazil is a major economic power in South America, an important emerging market globally, and a resource-driven economy. Its growth is highly correlated with the commodity cycle. Brazil’s rich resource endowments may benefit from the current changes in the global energy landscape.”

Brazil is extremely rich in mineral resources, with key minerals like niobium and iron highly complementary to China’s strategic mineral resources. In terms of energy, Brazil is the second-largest oil reserve country in South America and the largest oil producer. With abundant hydropower resources, Brazil’s electricity supply heavily relies on renewable energy. Under its advantageous resource endowments and export-oriented economic development, Brazil once created a miracle of economic growth in the last century.

JPMorgan predicts that 2026 could be a year of significant foreign investment inflows into Brazil’s stock market, as global funds’ allocation to emerging markets is currently low (only 5.3%). If it rebounds to the historical average (6.7%), it could bring about $25 billion in capital inflows.

Guotai Haitong believes that in the long term, Brazil’s economy needs to solidify its foundation by balancing “fiscal sustainability, inflation stability, and industrial transformation,” and achieve productivity improvements through structural reforms. Drawing on country-specific and historical experience, the key is to actively promote the “re-industrialization” strategy, strengthen the industrial base, reshape industrial competitiveness, and upgrade the industrial chain to high value-added segments.

The institution also emphasizes that Brazil has recently implemented a “New Industrial Plan,” increasing manufacturing output and export ratios, aiming for economic transformation, narrowing social income gaps, and improving social welfare. Compared to other resource-rich countries and Latin America, Brazil has advantages in market size, education level, open business environment, and industrial infrastructure. As a regional power with relatively stable geopolitical and trade conditions, Brazil is expected to leverage its large population to generate development dividends, boost productivity, and attract sustained overseas investment inflows and repatriation.

(Source: Securities Times)