Credit: Magnific
USPX39 began trading on B3 on September 23. The receipt is backed by shares of the Franklin U.S. Equity Index ETF, which trades in the United States under the ticker USPX. One ETF share corresponds to six BDRs. The Brazilian program is intended for qualified investors.
The ETF seeks to track the Morningstar US Target Market Exposure Index before expenses. The index consists of large- and mid-cap US stocks weighted by free-float-adjusted market capitalization. The largest companies therefore exert greater influence on returns, even though the portfolio contains hundreds of holdings. The index tracked by USPX is different from the S&P 500.
Technology accounts for more than one-third of the portfolio
USPX holds around 480 stocks. Nvidia, Apple, Microsoft, Amazon and Alphabet were among its largest positions. Information technology accounted for 38.45% of assets by sector. Financials made up 12.49%, followed by communication services at 9.58%, healthcare at 9.03% and consumer discretionary at 8.88%.
The portfolio spans several sectors, but the weight of technology makes large companies in that industry a central driver of the fund’s results.
What the comparison with SPY shows
USPX’s annual history can be compared with SPY, an ETF that tracks the S&P 500. Dollar-denominated total returns for the two funds were close over the three most recent full years:
| Year | USPX | SPY |
|---|---|---|
| 2016 | 0.91% | 7.49% |
| 2017 | 23.80% | 21.70% |
| 2018 | -7.77% | -4.56% |
| 2019 | 26.58% | 31.22% |
| 2020 | 9.80% | 18.37% |
| 2021 | 19.53% | 28.75% |
| 2022 | -18.87% | -18.17% |
| 2023 | 27.08% | 26.19% |
| 2024 | 24.96% | 24.89% |
| 2025 | 17.78% | 17.71% |
| 2026 | 13.23% | 13.48% |
USPX outperformed SPY by 0.89 percentage points in 2023 and by 0.07 percentage points in each of the following two years. SPY provides a reference for comparing USPX with another large-cap US equity ETF.
The longer track record requires care because the strategy changed. Although the fund has existed since 2016, it began tracking its current Morningstar index in August 2022. Before then, its performance was tied to the LibertyQ Global Equity Index.
How USPX reaches Brazilian investors
USPX39 trades in reais on B3, but is backed by a US ETF. The receipt’s price depends on the fund’s value abroad, the exchange rate and BDR trading conditions. USPX’s historical return in dollars is therefore not the same as USPX39’s return in reais; the latter began trading in Brazil in September.
The foreign ETF’s stated annual expense ratio is 0.03%. That figure applies to the underlying fund and does not cover every cost associated with trading the BDR. Understanding USPX39 therefore requires looking at three factors together: concentration in its largest holdings, US stock-market performance and the exchange rate’s effect on its price in reais.
This content is solely for informational purposes and does not constitute a recommendation to invest in, buy or sell any asset.
