Compared to last year, 2014 has been a banner year for Brazil exchange traded funds.
Buoyed by President Dilma Rousseff’s faltering poll numbers ahead of October’s national election and a resurgent Petrobras (NYSE: PBR), among other catalysts, the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) is up 13.3% year-to-date. That makes the largest Brazil ETF the second-best performer among the four major BRIC single-country ETFs. [Poll Results Lift Brazil ETFs]
The Market Vectors Brazil Small-Cap ETF (NYSEArca: BRF) has posted a 2014 gain of almost 6%, but the EGShares Brazil Infrastructure Index Fund (NYSEArca: BRXX) has, until recently, struggled to keep pace with EWZ and BRF.
To be fair, BRXX is in rally mode ahead of next month’s World Cup. The ETF has surged 15.4% over the past three months, but that upside is more likely by virtue of the broader rally in Brazilian equities than anticipation of World Cup infrastructure projects.
BRXX has lost 17.4% since its Feb. 2010, proving the ETF, through no fault of its own, has not benefited from the thesis that Brazilian infrastructure would swell ahead of World Cup and 2016 Summer Olympics. [World Cup Prep Hasn’t Lifted Brazil ETFs]
Brazil’s preparation efforts for the World Cup have been so suspect that one point, there was rampant speculation FIFA would pull the tournament from Latin America’s largest economy. Several workers have died while working on Brazilian stadiums and the government there has proven ineffective at delivering on the promise of pre-World Cup and Olympics largess.