As the presidential elections heat up in Brazil, the push toward economic reforms could help bolster Brazilian currency and fixed-income related exchange traded funds.

A new administration could mean embracing reform and macro-economic adjustments, reports Dimitra DeFotis for Barron’s.

“We favour longs in BRL [Brazilian Real], given its balanced risk/reward and short investor positioning,” Morgan Stanley economists said. “In local bonds, the 10-year NTN-Fs sector still offers some upside, particularly in a positive macro scenario, while short-dated NTN-Bs offer interesting defensive strategies.”

ETF investors can use the WisdomTree Brazilian Real ETF (NYSEArca: BZF) to monitor shifts in the Brazilian real against the U.S. dollar. Year-to-date, BZF has gained 10.8%.

An improved outlook on the Brazilian real and local bonds would also help benefit local-currency-denominated debt ETFs like the WisdomTree Emerging Markets Local Debt Fund (NYSEArca: ELD) and Market Vectors Emerging Markets Local Currency Bond ETF (NYSEArca: EMLC). Brazil makes up 11.0% of ELD and 9.8% of EMLC.

However, the U.S. dollar has been strengthening against a basket of foreign currencies, and investors who still want exposure to emerging market bonds, including Brazilian debt, can consider U.S.-dollar-denominated EM bond funds, such as the iShares J.P. Morgan USD Emerging Markets Bond ETF (NYSEArca: EMB), which has a 5.5% position in Brazil, and PowerShares Emerging Markets Sovereign Debt Portfolio (NYSEArca: PCY), which has a 4.6% weight toward Brazil. [Considering Your Emerging Market Bond ETF Options]