In February, Moody’s downgraded debt issued by Petrobras (NYSE: PBR) to Ba2, two levels below investment grade, stoking speculation regarding Brazil’s sovereign credit rating. Slack GDP estimates and a tumbling real are among the downside catalysts pressuring Brazilian stocks and EWZ. Brazil’s planning ministry attributes a major portion of the turn to the projected depreciation of about 21% in the real currency against the U.S. dollar. [Brazil ETF Slides, Bleeds Assets]

U.S.-listed shares of Petrobras, Brazil’s state-run oil company, have lost nearly a third of their value this year. Two Petrobras securities combine for 7.6% of EWZ’s weight.

Perhaps surprisingly, investors have added $13.7 million in new assets to BRF this year, but the flows story with EWZ is far less sanguine. Investors have yanked almost $764 million from EWZ, by far the worst total among the major Latin America single-country ETFs.

iShares MSCI Brazil Capped ETF