EWZ: Is There Upside Left For The Brazilian Index?

Summary

• The current P/E and P/S ratios reflect that the market is currently slightly overvalued.

• For those who are long, EWZ is a hold.

• Updated Sector and Industry analysis to come after the end of the earnings season.

So far I have written three articles where I provided the reader with multiples for the IBrX 50 which is strongly and positively correlated with the Brazilian Index, Ibovespa. The ETF EWZ is almost a full replication of the Bovespa Index. EWZ gives its investors exposure to both the Brazilian equity market and the Brazilian real. The point here is that the FX rate is not hedged and therefore you are exposed to two risk factors, so be aware of this issue when analyzing this investment opportunity.

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