EWZ: A China ETF that Happens to Speak Portuguese (TheReformedBroker)

• Joshua M Brown
 
• November 29th, 2010

"I'm avoiding China, I think it's a bubble.  I'm only buying Brazil, like the EWZ."

- Stockbroker I Know

Let me help you out there, junior, even though we've been through this before.  With record amounts of cash chasing various emerging markets flavors, I think this is an important concept to bring back to the fore.  China's road, bridge and infrastructure build-out accounts for half of the country's GDP based on this weekend's NYT Magazine story.  Should the country truly shift gears toward a more consumer-oriented economy, the chief vendors to China's infrastructure story will surely be affected.

Once you understand that concept, it becomes important to recognize that $EWZ, the most common vehicle investors use for Brazil exposure, is not really a Brazilian ETF.  Yes, I know its called the iShares MSCI Brazil whatever, but other than some big Brazilian banks, the entire thing is based on the Chinese economy, not the Brazilian domestic situation (which I like, by the way).

Let's quickly take a peek at EWZ's top five holdings (half the fund), directly from the latest iShares update:

READ FULL POST HERE