3 ETFs Offering Exposure to Latin America’s Stock Market Rally

Key Points

• Several Latin American equity markets have outperformed the S&P 500 year to date, helped by commodity exposure, emerging-market inflows and lower valuations.
• The iShares MSCI Brazil ETF and iShares MSCI Mexico ETF give investors targeted country exposure, but both come with concentration risk.
• The iShares Latin America 40 ETF offers broader regional access, though its holdings remain heavily tilted toward Brazil and Mexico.

Although not uniform across the region, a number of Latin American equity markets have outperformed the S&P 500 year to date (YTD). Emerging markets in Peru, Colombia, Brazil, and elsewhere have all beaten the S&P's 9% YTD returns, thanks to a combination of factors, including higher prices for certain commodities, growing AI-related demand for outputs such as copper, lithium, and nickel, and favorable company valuations.

Globally, investors are rotating toward emerging markets to capture strong earnings growth and to take advantage of these lower valuations, and the Latin American market may be poised to continue to benefit from that pivot. While risks remain—economic growth remains modest overall, and political instability is a central feature in many countries, for instance—U.S. investors can easily build exposure to the space with the use of several dedicated exchange-traded funds (ETFs).

EWZ Offers Liquid Exposure to Brazil’s Financials and Materials

The iShares MSCI Brazil ETF NYSEARCA: EWZ tracks the MSCI Brazil 25/50 Index, offering investors access to a pool of roughly 57 large- and mid-cap Brazilian stocks. These positions are primarily across the financials, materials, utilities, and energy sectors, but also include representation from other corners of the market. A handful of major firms—including major mining operation Vale S.A.—dominate the portfolio, and the top 10 holdings account for some 58% of invested assets.

This concentration may not be a bad thing, given that Brazil's market has benefited from agriculture, mining, and financial stock performance. Though the country is heavily dependent upon some commodity prices, and interest rate and inflation concerns linger into the second half of the year, EWZ has so far been a strong performer in 2026, returning more than 8% YTD and nearly 29% in the last 12 months.

Like many other country-specific funds, investors can expect to pay a premium for targeted access to the Brazilian market via EWZ. The ETF charges an annual fee of 0.59%, which is on the high side compared to most other passively managed funds. However, it remains highly liquid and very popular among investors based on about $9 billion in assets under management (AUM) and about 32 million shares in one-month average trading volume.

EWW Offers Mexico Exposure With Nearshoring Tailwinds

The Mexican market has gotten a boost from some of the factors indicated above, as well as nearshoring—the practice of, in this case, U.S. companies moving their production across the border to cut down on costs. This has been a benefit to industrial real estate, manufacturing, logistics, and other industries in Mexico.

The iShares MSCI Mexico ETF NYSEARCA: EWW is akin to its sibling, EWZ, in that it provides a country-specific focus and a narrow portfolio. In this case, EWW holds 44 positions across the market capitalization spectrum, although large-cap names continue to dominate—and, like EWZ, a few heavy hitters have outsized weighting in the basket.

An advantage that EWW has over its peers is that it is somewhat less expensive, with an annual fee of only 0.50%. At the same time, it has slightly outperformed EWZ in recent quarters, returning nearly 9% YTD and close to 30% in the last 12 months. This fund also sports a dividend yield of 3.25% for investors seeking a passive income boost. On the other hand, AUM of close to $1.9 billion and the one-month average trading volume of about 1.4 million shares are substantially lower than those of EWZ.

ILF Offers Broad Latin America Exposure in One ETF

Investors looking for a single fund to build broad exposure to Latin America might find the iShares Latin America 40 ETF NYSEARCA: ILF, which not only offers the widest geographical reach of the funds on our list but also has the lowest fee at only 0.47%. That said, because of ILF's mandate to focus on 40 of the largest publicly traded LatAm companies, the ETF really provides exposure primarily to Brazil, Mexico, and Chile, with a small allocation for Peru and even smaller exposure to Colombian equities.

ILF is therefore a fairly concentrated play, but it can be a good choice for investors looking for more established firms in the financials, materials, energy, and consumer staples spaces. The strategy has paid off this year: ILF has returned almost 11% YTD and 37% over the past 12 months, on top of a 3.50% dividend yield. For investors seeking more exposure to Latin America beyond this fund, it will be important to ensure there isn't overlap between ILF and other portfolios, given this ETF's focus on major players.