Latin American equities have quietly become one of the strongest regional trades of 2026, and three exchange-traded funds capture the move from very different angles. iShares MSCI Brazil ETF (NYSEARCA:EWZ | EWZ Price Prediction) is up about 26% year to date on a wave of commodity strength and improving fiscal signals. iShares MSCI Mexico ETF (NYSEARCA:EWW) has added roughly 15% as factories continue migrating closer to U.S. customers. Pacer Emerging Markets Cash Cows 100 ETF (NYSEARCA:ECOW) sits between them with a 17% gain and a free-cash-flow screen that quietly tilts toward the same region.
Each fund expresses the Latin America thesis through a different mechanism: a pure commodity and rate-beta in Brazil, supply-chain reshoring in Mexico, and a quality-screened emerging-markets basket that lets the math do the country selection. The choice between them is less about which country wins and more about which return engine an investor actually wants exposure to.
EWZ: A Direct Bet on Brazilian Commodities and Rates
EWZ is the most concentrated way to express a constructive view of Brazil. The fund tracks the MSCI Brazil index and leans heavily on the country’s largest commodity exporters and banks, with Petrobras, Vale, and Itau historically anchoring the portfolio’s top positions. That structure ties the fund’s fortunes to two macro variables: the price of oil and iron ore, and the trajectory of Brazilian interest rates.
The commodity tailwind is doing real work right now. WTI crude trades near $110 a barrel, sitting in the 98th percentile of its historical range, after starting the year around $57. That price action flows directly into Petrobras’ revenues and the country’s terms of trade, which in turn support the real and equity markets. The Brazilian currency is at about 4.94 to the dollar, leaving room for further appreciation if commodity strength persists.
Performance has mirrored the backdrop. EWZ has climbed roughly 47% over the past year and trades near $39, with a 0.59% expense ratio. The familiar vulnerability still hangs over it. A small cluster of companies drives most of the index, oil prices set the overall tone, and shifts in Brazilian politics can reprice the entire fund in a single session. The five‑year return of about 2% sits far below the one‑year surge, which reinforces how this exposure tends to arrive in bursts rather than build steadily over time.
EWW: The Cleanest Way to Own the Nearshoring Trade
If Brazil is the commodity trade, Mexico is the supply-chain trade. EWW holds about 99.8% Mexican equities and reads like a directory of the companies that benefit when manufacturing capacity moves from Asia to within trucking distance of Texas. The fund charges 0.50% and currently manages about $2.1 billion.
The portfolio composition is what makes this a nearshoring vehicle rather than a generic country fund. Materials and industrials together account for roughly 34% of assets, with cement giant Cemex at 4% and the two listed airport operators, Grupo Aeroportuario del Pacifico and Grupo Aeroportuario del Sureste, at about 6.5% combined. Those are direct picks-and-shovels exposures: more factories require more concrete, more cargo flights, and more border-region logistics. Financials add another 18% through Banorte and others, capturing the credit demand that comes with industrial buildout.
Concentration is the clear caveat. The top ten holdings account for about 63% of the portfolio, with Grupo Mexico at roughly 12.8% and Banorte at nearly 10.7%. A policy fight in any major sector, whether mining royalties, banking rules, or telecom spectrum, can move the entire fund. The dividend yield sits near 2.6%, which helps take the edge off the volatility but does not remove it. EWW has returned about 41% over the past year and roughly 98% over five years, a steadier compounding path than EWZ has delivered.
ECOW: The Quality Screen That Quietly Owns Latin America
ECOW is the contrarian pick on this list because it does not market itself as a Latin America fund at all. Pacer’s Emerging Markets Cash Cows 100 takes the broad EM universe, screens for the 100 companies with the highest trailing free cash flow yield, and weights them accordingly. Brazilian and Mexican names tend to dominate the resulting portfolio because commodity producers and entrenched domestic franchises in those markets routinely throw off the kind of cash the screen is hunting for.
The methodology matters. Cap-weighted EM indexes have been dragged for years by money-losing Chinese tech and state-owned enterprises that dilute returns. A free-cash-flow yield screen mechanically rotates capital toward businesses that generate actual cash today, which is a useful overlay during a period when commodity prices and a high cost of capital reward profitable producers over speculative growth stories.
The recent numbers suggest the strategy is landing well in this market. ECOW is up about 17% year to date and roughly 36% over the past year, with the share price near $29. That pace has outstripped EWW so far this year while still offering a broader mix of holdings. The structure cuts both ways. Investors give up the precision of a single‑country bet, and the fund’s free‑cash‑flow tilt can lag badly in stretches when growth stocks and money‑losing disruptors lead the tape, which happened more than once over the past decade.
Choosing Between the Three
The three funds align neatly with three distinct convictions. An investor who expects oil to stay firm and believes Brazilian rates have already peaked finds the most upside in EWZ, while recognizing that either variable can flip quickly and reset the trade. An investor who is focused on the multi‑year rebuild of North American supply chains gets the cleanest read in EWW, where cement, airports, banks, and mining carry most of the weight.
An investor who wants Latin America exposure without choosing a single country, or who is skeptical of cap‑weighted emerging‑market indexes, can use ECOW for a quality‑screened version that has captured much of the regional rally while spreading risk more broadly. The funds do not substitute for one another, and holding all three would stack exposure to the same Mexican and Brazilian large caps that already dominate each portfolio.
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