Preference for Mexico ETF has Investors Missing out on Brazil

As the largest exchange traded fund tracking Latin America’s largest economy, the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) receives plenty of attention in the financial press, blogosphere and other outlets.

Recently, attention and praised heaped on EWZ has been well deserve. The ETF entered Friday with an 8.6% year-to-date gain, making it easily the best-performing single-country fund tracking a Latin American nation. Up over 19% in just the past month, EWZ is now the second-best of the four major BRIC single-country ETFs this year, trailing only the WisdomTree India Earnings Fund (NYSEArca: EPI). And for good measure, EWZ has been rising on days when U.S. stocks falter. [Brazil ETFs Standout]

None of that has been enough to keep investors from preferring the iShares MSCI Mexico Capped ETF (NYSEArca: EWW) over EWZ and other Brazil funds.

“The gap between Mexican and Brazilian flows climbed to $570 million during the first seven business days of April, with $148.7 million of inflows to Mexico and $421.3 million in Brazil outflows,”  according to Bloomberg.

Translation: Investors have pulled money from EWZ and other Brazil ETFs this month (and this year) while devoting capital to the lagging EWW. In the past week, while investors have pulled money from EWZ, the ETF is up more than 4%. EWW is lower by 1%. The lone Mexico ETF is more than 4% this year, making it the worst-performing LatAm single-country fund. [Mexico ETF Losing Ground]