IBZL
iShares MSCI Brazil UCITS ETF USD (Dist)
Published by Radif Partners · Updated
Overview
iShares MSCI Brazil UCITS ETF USD (Dist) (IBZL) tracks the MSCI Brazil index and holds its constituents directly, a physical replication managed by iShares. Dividends are paid out to holders rather than reinvested, so IBZL suits investors seeking regular income. The fund is domiciled in IE, which determines the withholding tax treatment applied to its dividends. Annual charges come to 0.74% of assets, and the fund holds 519M under management. Over five years the fund returned 9.5% a year on average, against 8.2% over three years. It is not eligible for the French PEA, but can be held in a securities account, a UK ISA or a German Depot. Its risk level is rated high. Launched on 2005-11-18, the fund is denominated in USD and has 21 years of track record. It is a UCITS fund, so it follows the European framework on diversification, liquidity and asset segregation. Because IBZL distributes, every payment is taxable in the year it is received, against the dividend allowance in a general account, while it stays sheltered inside an ISA or a SIPP. Domicile in IE sets the withholding the fund itself suffers on the dividends it receives, a cost absent from the stated fee but present in the return.
At 0.74%, this fund costs more than twice the median of its category (0.19%) and over 37.0 times the cheapest (0.02%). On £10,000 the gap to the median is worth about 550 over ten years, and that difference is certain in a way no performance gap is. A premium can be justified, by an index no competitor tracks, by a useful trading currency, or by size that guarantees liquidity; it is not justified by the brand. The question is therefore plain: what does this fund offer that the cheapest on the list does not?
Replication is physical: the fund actually holds the constituents of MSCI Brazil, which makes its contents verifiable line by line in the issuer's report. Two points deserve attention. Securities lending first, practised by most physical funds to reduce costs: it earns a few hundredths of a point and creates an exposure to the borrower, covered by collateral, with the annual report stating the proportion lent. Rebalancing second: every change in the index's composition forces the fund to buy and sell, and those internal costs are not in the 0.74% headline. That is why two funds at the same price do not track their index with the same fidelity.
The domicile, Ireland, is not an administrative detail: it determines the withholding tax the fund suffers on the dividends it receives, and that loss appears in no fee table. On US equities, the Ireland-US treaty cuts withholding from thirty to fifteen per cent, which on a world index is mechanically worth several tenths of a point a year and explains Irish dominance of this segment. For the holder, the UCITS framework also brings the key information document in their own language, diversification rules, and separation of the fund's assets from the issuer's.
Income is distributed: the fund pays out the dividends it receives, usually one to four times a year. For a holder living off the portfolio that is what is wanted, since the income arrives without selling. For someone still accumulating it is a tax disadvantage in a taxable account: each payment is taxed in the year received, so the amount reinvested is reduced before it starts working again. Reinvesting by hand also costs a dealing commission each time and often leaves cash idle for want of the price of a whole unit. An accumulating class on the same index, where one exists, settles the question.
With 519 million in assets and 21 years of history, this fund has the size and the record that make closure unlikely and the spread narrow. Three checks remain, once a year, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of MSCI Brazil, which can change its selection or weighting rules without the fund's name moving, in which case what you hold has changed with nothing to announce it.
MSCI Brazil covers a single country, which concentrates three risks at once: its economy, its currency and its sector structure, since a national index reflects the country's industrial history rather than a chosen balance. A country position therefore makes sense to complete an already diversified portfolio, rarely to build one. The question to settle before buying is currency: a return published in one currency and real exposure to another diverge over several years, and a currency-hedged fund answers a different question, at the price of hedging costs that vary with the interest rate gap.
Over one year the fund shows 39.5% against 9.5% annualised over five years: the recent year sits well above the long average. A gap in that direction mainly counsels care about the entry point, since what has risen sharply lately costs more today than a year ago, and the long average is the figure that best describes what to expect.
0.74%
519M
519M USDHigh
80
Physical
Distributing
USD
IE
MSCI Brazil
iShares
2005-11-18 (20 years)
Contextual Analysis
Fund Size
With 519M in assets, this is a mid-sized fund, decent liquidity for most investors.
Fee Positioning
A TER of 0.74% is above the market average (~0.35%), justified if the strategy is specialized.
Track Record
Launched in 2005-11-18, this fund has 20 years of history, long and reliable track record.
Risk Profile
High risk, suited for long-term investors comfortable with volatility.
Performance
Returns Summary
| Period | Ann. Return | Cumulative |
|---|---|---|
| 1 Month (est.) | – | +2.8% |
| 3 Months (est.) | – | +8.7% |
| 6 Months (est.) | – | +18.1% |
| YTD (est.) | – | +14.9% |
| 1 Year | +39.5% | +39.5% |
| 3 Years | +8.2% | +26.7% |
| 5 Years | +9.5% | +57.4% |
| Since inception (20y) | +19.1% | +3183.1% |
Key Facts
Fund Profile
Themes & Zones
Holdings
Risk
How to Buy This ETF
Select your country in the menu to see available brokers and wrappers.
About this ETF
The iShares MSCI Brazil UCITS ETF USD (Dist) tracks the MSCI Brazil index. It is managed by iShares using physical replication and follows a distributing distribution policy. The fund is denominated in USD and domiciled in IE. It has a total expense ratio (TER) of 0.74%.
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Frequently asked questions
What do IBZL's 0.74% charges actually cost?
They are taken from the fund's value continuously and never billed separately: on £1,000 invested that is about £7.40 a year and roughly £74 over ten years at a constant amount. That is the only cost of the fund itself. Your broker's commission and the spread between buying and selling price come on top, and they weigh most on small frequent purchases.
How do you buy IBZL, and on which venue?
Through any broker that lists ISIN IE00B0M63516. The same strategy often exists in several share classes with different fees and distribution policies, and what counts is the class you buy rather than the one you read about: check the ISIN, not the name. A limit order avoids paying the spread of a thin order book, particularly outside the trading hours of the underlying markets.
Is IBZL genuinely diversified?
Less so than the number of holdings suggests. MSCI Brazil weights its constituents by market capitalisation, so the largest companies make up a share of the fund far above their number, and that concentration deepens without any rule changing. The useful check is the weight of the top ten holdings, published monthly by iShares: that figure says how many companies the outcome actually depends on.
What should you re-check on IBZL once a year?
Three things, none of which depends on the market. The ongoing charge, which an issuer revises without notice and whose gap to a competitor can invert. The tracking difference, the only figure that says whether replication stays faithful. And the methodology of MSCI Brazil, which can change its selection or weighting rules without the fund's name moving: in that case what you hold has changed with nothing to announce it.
Does IBZL lend out the securities it holds?
Probably in part: most physical funds lend securities to reduce their costs, and iShares publishes the proportion in the annual report. Lending income is worth a few hundredths of a point, shared between the fund and the issuer. The risk is the borrower's, covered by collateral worth more than the amount lent, and it appears in the prospectus rather than in the stated fee.
This ranking is for informational purposes only and does not constitute a recommendation to buy or sell any security. Displayed performance is simulated.