Brazilian Bungle: More New Lows for Brazil ETFs

Friday, protests took to Brazilian streets in support of Petrobras and Rousseff, perhaps further irritating investors that endured a tumble that has seen the Brazilian oil giant be the worst-performing oil stock in the world over the past five years.

Still, short selling and bearish options activity in EWZ has been light.

“Options flows in EWZ have never returned to “pre-election” levels, and we are hard pressed to find any significant trends at these levels (EWZ with another new “low” handle today of $29), although the fund has seen >$275 million flow out via redemption activity year to date, eroding its asset base to the $3.1 billion mark. We suspect BRZS (Direxion Daily Brazil Bear 3X) would be popular in this environment so it is a shame that the issuer chose to de-list the product some time ago,” said Street One Financial Vice President Paul Weisbruch in an email exchange with ETF Trends on Friday.

To be precise, investors have pulled about $276 million from EWZ this year, or about $181 million less than has been pulled from the iShares MSCI Mexico Capped ETF (NYSEArca: EWW).

iShares MSCI Brazil Capped ETF