ETF Chart of the Day: Bad News Brazil

ETF Trends

We have spent a good amount of time recently covering put activity and asset outflows in broad Emerging Markets equity products, specifically EEM (iShares MSCI Emerging Markets, Expense Ratio 0.67%) and VWO (Vanguard FTSE Emerging Markets, Expense Ratio 0.18%), and we have commented about the erratic price action in Brazil recently as well.

EWZ (iShares MSCI Brazil, Expense Ratio 0.60%) continues to notably lag the broader proxy EEM, and Brazil makes up 8.52% of the MSCI EM Index currently. After grounding out as low as $46.11 this Wednesday, EWZ has sprung back to life on strength in the greater Emerging Markets space led particularly by a China rally.

EWZ has lost assets recently via redemption activity, seeing about $371 million vacate the fund in recent sessions. Year to date the fund has hemorrhaged $3.45 billion in net outflows, but the fund still remains the largest Brazilian equity focused ETF in the marketplace with $4.83 billion in assets under management.

EWZ is substantially larger than its next closest competitor in the space, BRF (Market Vectors Brazil Small Cap, Expense Ratio 0.59%) which has $220 million in assets under management.

There are
several other ways to play Brazil, with most of these funds considerably smaller than EWZ. Names to look at include BRXX (EGShares Brazil Infrastructure, Expense Ratio 0.85%), EWZS (iShares MSCI Brazil Small Cap, Expense Ratio 0.60%) and BRAQ (Global X Brazil Consumer, Expense Ratio 0.77%) just to name a few.

There are several leveraged/inverse funds in existence as well in the Brazil space that may attract aggressive short term traders as well as hedgers, and these funds are UBR (ProShares Ultra MSCI Brazil, Expense Ratio 0.95%), BZQ (ProShares UltraShort MSCI Brazil, Expense Ratio 0.95%), BRZU (Direxion Daily Brazil Bull 3X Shares, Expense Ratio 0.95%), and BRZS (Direxion Daily Brazil Bear 3X Shares, Expense Ratio 0.95%). EWZ is not alone in seeing assets vacate the fund year to date likely due to flagging performance in Brazil, as BRF has lost $214 million YTD, and BRXX has lost about $6.4 million during this timeframe.

iShares MSCI Brazil Capped ETF

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