Shares of the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ), the largest ETF tracking Latin America’s largest economy, slumped in midday trading after various international news agencies reported presidential candidate Eduardo Campos was aboard a plane that crashed in Santos, Brazil. GloboNews, a local news agency, reported Campos was killed in the crash.
“A police official in Santos said there were “certainly” fatalities in the crash, but could not say how many or provide any additional information,” reports Reuters.
Underscoring President Dilma Rousseff’s tenuous grasp on power and Brazilians’ dissatisfaction with her performance, EWZ immediately slid on heavy volume following news Campos’ death. EWZ is off 0.5% on volume that is already 77% above the daily average
The ProShares UltraShort MSCI Brazil Capped (NYSEArca: BZQ) and the Direxion Daily Brazil 3x Bear Shares (NYSEArca: BRZS) each popped after the news. Volume in BZQ, a double-leveraged bearish play on Brazilian stocks, is about 30% above the daily average.
Campos was running third in polls behind Rousseff Senator Aecio Neves. Campos’ running mate, Marina Silva, was not on board the plane, according to Reuters.
EWZ is up 6.2% since the start of June, a time frame that has included several polls highlighting waning support for Rousseff. The ETF has shown a penchant for rallying on days in which those poll numbers are released. For example, EWZ jumped more than 3% on June 6 when a poll showed Rousseff’s support had dipped to 34% from 37% in May. [Rousseff Woes Equal Gains for Brazil ETFs]
Despite EWZ’s 13.1% year-to-date gain, investors have pulled more than $53 million from the fund in the current quarter.
iShares MSCI Brazil Capped ETF
ETF Trends editorial team contributed to this post. Updated to reflect news of Campos’ death.