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We've spun the wheel for the Emerging Markets bucket. The ticker has landed in a city of 180,000 people in southern Brazil, on a company that almost nobody outside the industrial world has heard of. And that in 2025 was officially recognised as the world's largest manufacturer of low-voltage electric motors.

Before we dive in, a reminder of what the index itself has delivered over time.

Every week, we pull one company at random from the FTSE All-World with ~4,200 companies representing 90% of global stock market wealth. We share the index's long-term returns as a reminder of why we're here: the long game. New to the newsletter? Start here.

Founded on September 16, 1961 in Jaraguá do Sul, Brazil. Listed on the Brazilian stock exchange since 1971.

Think about a factory floor anywhere in the world. The conveyor belt moving. The pumps running. The fans keeping the machinery cool. Behind almost every one of those moving parts is an electric motor. A fairly unglamorous device. Basically a coil of wire, some magnets, and the laws of physics turning electricity into rotation.

WEG makes more of them than anyone else on earth.

A few key facts:

We'll come back to that return on invested capital figure in a moment.

The name WEG is an acronym. Werner Ricardo Voigt, Eggon João da Silva, and Geraldo Werninghaus: an electrician, an administrator, and a mechanic. Three men who pooled their skills on September 16, 1961, and founded a small motor workshop in Jaraguá do Sul, a city in the southern state of Santa Catarina settled largely by German immigrants. Werner was a descendant of immigrants from the Düsseldorf region and had been rewinding electric motors in his own workshop since age 23. The name also happens to mean "path" in German.

In their first year, they made 146 motors. By 1962, output had reached 4,085.

WEG became the dominant employer in Jaraguá do Sul within two decades. The company reportedly hired only people born in the city for years. A deliberate choice to avoid a flood of migrants overwhelming a town that simply wasn't big enough to absorb them. Today the city has around 180,000 people. WEG employs 49,000 worldwide. The founders' families still control roughly two-thirds of the shares. All three founders are now deceased, but their descendants run the company and remain billionaires through it.

A company literally built into its hometown, and then into the world.

The short answer: anything that turns electricity into movement, or movement back into electricity. And the infrastructure to deliver electricity safely in between.

Electric motors are the core. Over 19 million a year, across hundreds of variants. Small motors inside air conditioning units. Mid-sized motors driving pumps, fans, and conveyor belts in factories. Enormous motors pulling mining equipment deep underground or powering ship propulsion. If it spins in an industrial setting somewhere in the world, there is a reasonable chance a WEG motor is doing it.

Generators and transformers sit at the other end. When a wind farm in Brazil or a hydroelectric plant in Africa needs to produce electricity and push it onto the grid, WEG makes the generators and the transformers that step the voltage up for long-distance transmission and back down for safe delivery. Transformers are the quiet bottleneck of every electrification project on earth, and WEG is one of the few companies that can supply them at scale.

Drives and automation tie it together. A variable frequency drive is the device that controls how fast a motor runs, rather than just switching it on or off. Running a pump at 80% speed uses dramatically less energy than full speed. These products, alongside industrial automation systems, are where WEG has been growing fastest.

Then there are paints and varnishes, a somewhat surprising product line. WEG manufactures industrial coatings for marine, automotive, and offshore use. It's a legacy of the same vertical integration philosophy that runs through everything: if you can control the input, control it.

Most manufacturers buy components from suppliers and assemble the final product. WEG does almost everything itself. Its own foundries cast the motor housings. Its own wire mills wind the copper coils. Its own stamping plants produce the laminations inside the motors. Its own coating factories supply the varnishes that insulate them.

This started in Jaraguá do Sul, where a sprawling industrial complex now covers the better part of the city, and has been replicated across 67 facilities in 18 countries. The logic is straightforward: controlling every step reduces costs, improves quality, and makes the business harder to disrupt. It also shows in the numbers. A return on invested capital of 32.5% is genuinely exceptional for a company that makes physical things in factories.

Energy transition. Every wind turbine needs a generator. Every solar farm needs inverters and transformers. Every EV charging station needs grid infrastructure. WEG is already deep in all of it. 71% of its revenue in 2025 came from products classified as sustainable. The company is now building new factories specifically to serve North American grid buildout, driven by AI data centre demand.

Data centres. A point worth lingering on: two editions ago we covered Schneider Electric, the French group powering the electrical infrastructure of AI data centres. WEG is in the same story, one layer deeper. The transformers that step down voltage before it reaches a data centre? WEG makes those. The motors running the cooling systems inside? WEG makes those too. It invested BRL 2.7 billion in new capacity in 2025 alone.

Industrial automation. Factories adding robots and automated production lines are adding motors, drives, and control systems. Every new automation project is a WEG project in miniature.

2025 was a solid year. Revenue of BRL 40.8 billion, roughly USD 7.3 billion at current exchange rates, up 7.4% on the prior year. EBITDA margin held at 22.1%, which translates to around USD 1.6 billion in operating earnings. Return on invested capital of 32.5%. The kind of figure that tells you a business is genuinely good at deploying the money it has, not just large.

Q1 2026 showed revenue of BRL 9.5 billion (roughly USD 1.7 billion), down 6.1% compared to Q1 2025. It’s worth understanding why: the Brazilian real strengthened against most major currencies during the quarter, which mechanically compresses reported revenue when overseas earnings are translated back. The underlying order backlog, including BRL 5 billion (around USD 900 million) already paid by customers for future deliveries, tells a different story. Operationally, the business continues to grow.

WEG reports in Brazilian reais, and Brazil has had a difficult macroeconomic stretch. High interest rates, fiscal pressures, and a currency that has swung sharply against the dollar and euro over recent years. For international investors, this creates a persistent gap between what the business has achieved in real terms and what the translated numbers show. A company growing revenue at 7% in BRL can look flat or even shrinking in USD, purely because of exchange rates.

This is the nature of investing in emerging markets through a world index fund. The exposure is real, the currency risk is real, and it doesn't go away. What also doesn't go away is the underlying business: one that generates a 32.5% return on invested capital, has compounded through six decades of Brazilian economic cycles, and just reached global leadership in its core product.

In 1961, three men in a small German-Brazilian town made 146 electric motors. In 2025, their company made 19 million, shipped products to 135 countries, and was recognised as the world's largest manufacturer of low-voltage motors.

The next time something hums, spins, or pumps somewhere in the world, WEG probably made it move. And if you own a world equity index fund, you own a small piece of the company behind it.

Data and images sourced from WEG 2025 Integrated Annual Report and WEG Q1 2026 Quarterly Results.

Next week, we'll be looking at a company from North America.