Brazil Stock Market Benefits from Rising Commodities; Two Brazilian ETFs Shine

Securities Times Reporter Li Mingzhu

Since the beginning of this year, among cross-border ETFs’ performance rankings, Brazil ETFs have performed remarkably well, attracting market attention.

Wind data shows that two ETFs tracking the Brazilian stock market in the A-share market—E Fund Brazil ETF (520870) and Huaxia Brazil ETF (159100)—have increased by 20.74% and 20.57% respectively this year, ranking fourth and fifth among cross-border ETFs in terms of gains.

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.

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

The index covers several key sectors where Brazil has a comparative 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. Other included companies are Latin American beverage giant Ambev, motor manufacturer WEG SA, and Eletrobras.

On March 25, both Brazil ETFs maintained their upward trend, with E Fund Brazil ETF rising 2.26% to close at 1.176 yuan, with a trading volume of 261 million yuan; Huaxia Brazil ETF rose 1.82% to close at 1.178 yuan, with a trading volume of 168 million yuan. Despite a slight decline in trading volume compared to the previous day, they remain the most watched products among cross-border ETFs.

In terms of fund size, according to Wind’s latest data as of March 24, E Fund Brazil ETF has a size of 516 million yuan, and Huaxia Brazil ETF has 425 million yuan.

Benefiting from Commodity Price Rise

Brazil’s stock market experienced a bull run in 2025, which has continued into 2026. In February 2026, the Ibovespa index hit a record high of 192,623.56 points.

Since their launch, the ETFs issued by E Fund and Huaxia have shown an overall upward trend. On January 30, the secondary market price of E Fund Brazil ETF hit a record high of 1.364 yuan, and on the same day, Huaxia Brazil ETF also reached a record high of 1.426 yuan. Recently, both ETFs have experienced significant fluctuations following global stock market trends.

“A recent strong performance of the Brazilian stock market may be related to the global rise in resource commodities driven by the Middle East situation,” analyzed a fund manager from South China specializing in non-ferrous metals. “Brazil is a major economy in South America, an important emerging market globally, and a typical resource-driven economy. Its economic growth is closely linked to the commodity cycle. Brazil’s outstanding resource endowment may benefit from the current changes in the global energy landscape.”

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

Potential for Continued Capital Inflows into Brazil

JPMorgan predicts that 2026 could be a year of significant foreign capital inflow into Brazil’s stock market, as global funds have allocated only 5.3% to emerging markets—below the historical average of 6.7%. If this ratio rebounds to the average, it could bring approximately $25 billion in capital inflows.

Guotai Haitong believes that in the long term, Brazil’s economy needs to balance fiscal sustainability, inflation stability, and industrial transformation to strengthen its foundation. Structural reforms aimed at improving productivity are crucial. Drawing on country-specific and historical experience, key strategies include actively promoting re-industrialization, solidifying industrial bases, reshaping industrial competitiveness, and upgrading the industrial chain to higher value-added segments.

The institution also notes that Brazil’s recent “New Industrial Plan” has increased manufacturing output and export ratios, aligned with economic transformation goals, narrowed social income gaps, and improved social welfare. Compared to other resource-rich countries and Latin American economies, Brazil has advantages in market size, education level, open business environment, and industrial infrastructure. As a regional power with stable geopolitical and trade conditions, Brazil is expected to leverage its large population to generate development dividends, boost productivity, and attract overseas investment.