Up 14.1% year-to-date, the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) trails only the WisdomTree India Earnings Fund (NYSEArca: EPI) for top honors among single-country BRIC ETFs this year.

EWZ, the largest country-specific ETF tracking a Latin America economy, and other Brazil ETFs have been bolstered by a resurgent real and the perception that Brazilian stocks are emerging markets value bets. Another primary catalyst behind EWZ’s 2014 bullishness is the President Dilma Rousseff’s waning popularity ahead of Brazil’s national elections in October.

EWZ and rival Brazil ETFs have previously shown an intimate correlation to negative poll news for Rousseff. In late April, EWZ soared to its highest levels since November 2013 a poll from MDA showed Rousseff’s support dipped to 37% from almost 44% in February. [Brazil ETF Pops as Polls Show Rousseff Slumping]

However, EWZ’s bullishness could be put to the test by familiar source of consternation for the ETF: Petrobras (NYSE: PBR). The struggling state-run oil producer’s decision to pay the Brazilian government $6.8 billion for drilling rights in the area that is home to the massive Buzios field has stoked speculation Petrobras may need to commence another dilutive share offering.

Petrobras is considering selling assets and restructuring other projects to help shoulder the cost, but the company is already the most indebted publicly traded oil company, according to Bloomberg.

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