With the first quarter drawing to a close today, it is fair to say the first three months of 2015 were unkind to Brazilian stocks and the relevant U.S.-listed exchange traded funds.

The Market Vectors Brazil Small-Cap ETF (NYSEArca: BRF) and the iShares MSCI Brazil Capped ETF (NYSEArca: EWZ), the largest and most heavily traded Brazil ETF, are poised to rank among the 10 worst non-leveraged ETFs in the first quarter. BRF and EWZ are down 22.5% and 14%, respectively, year-to-date.

A corruption scandal at Petrobras (NYSE: PBR), Brazil’s state-run oil company and one of EWZ’s largest holdings, high interest rates, a rising current account deficit and slack economic growth have been among the factors plaguing Brazilian stocks and ETFs this year.

“Arguably the biggest disappointment has been the steady erosion in economic growth. In 2010 Brazil grew by over 7%, but since then a drop in commodity prices and a lack of structural reforms have been punishing for the economy. Brazil did not grow at all last year, and is expected to stagnate again in 2015,” said BlackRock Chief Investment Strategist Russ Koesterich in a recent note. [Brazil ETFs Search for Catalysts]

Brazil, the world’s largest coffee producer, the second largest producer of soybeans, third largest of corn and exporter of oil and iron, is witnessing its current-account deficit distend. The country boasted a 1.9% trade surplus of gross domestic product in April 2005, but by January of this year, Brazil is seeing a deficit of 4.2% of GDP, Bloomberg reports. [Fragile Three Trade Deficits]

With sentiment at near bearish extremes against EWZ and some of the ETF’s marquee holdings, opportunistic, risk-tolerant investors may want to consider the ETF as a potential value proposition. In a note out Monday, Rareview Macro founder Neil Azous looked at Petrobras and Brazilian iron ore giant Vale (NYSE: VALE) as possibly, emphasis on “possibly,” offering value. Various Petrobras and Vale securities combine for 11.6% of EWZ’s weight.

“Put another way, the sentiment on Brazil is similar to the extreme point on Greece when there was speculation about it leaving the Eurozone a couple years back. Either there is a default, heart attack, prolonged recession, social unrest, etc. or something gives in the near future,” said Azous.

He notes that if some of the negativity surrounding Petrobras and Vale, including the corruption and slack global iron ore prices, ebbs, the stocks could double or even quadruple over the next year while adding that if the Brazilian real can find some relief from its bearish ways, that would be another positive for Petrobras and Vale.

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