S&P’s downgrade is seen as potentially problematic for President Dilma Rousseff as she seeks reelection later this year. Although Rousseff is popular in her native country despite its battles with inflation and some of the highest interest rates in the emerging world, financial markets could be signaling regime change would be a positive catalyst for Brazilian markets.
While Brazil ETFs have firmed in recent weeks, those funds still lag India and Indonesia ETFs by wide margins. Investors have bid India and Indonesia ETFs higher this year in anticipation of elections later this year that will deliver pro-market candidates to office. [Indonesia ETFs Soar Ahead of Election]
WisdomTree Emerging Markets Local Debt Fund
ETF Trends editorial team contributed to this post.