Brazilian markets and country-specific exchange traded funds plunged Thursday as some call for the resignation of President Michel Temer in response to reports of illegal payments to a disgraced lawmaker.

The iShares MSCI Brazil Capped ETF (NYSEArca: EWZ) declined 12.8% Thursday.

The WisdomTree Brazilian Real Strategy ETF (NYSEArca: BZF), previously one of this year’s best performing currency ETFs, decreased 6.4% Thursday.

On the other hand, the ProShares UltraShort MSCI Brazil Capped ETF (NYSEArca: BZQ), which attempts to deliver two times inverse of the daily performance of the MSCI Brazil 25/50 Index, surged 25.0%.

Brazilian markets plummeted and briefly came to a halt, posting their largest drop since 2008.

“Markets will overreact, but the reality is that Brazil is rooting out the corruption that has plagued it for centuries,” James Gulbrandsen, a Rio de Janeiro-based portfolio manager at NCH Capital who holds Brazilian shares, told Bloomberg. “This significantly increases the likelihood of new elections within the coming months.”

Subscribe to our free daily newsletters!
Please enter your email address to subscribe to ETF Trends' newsletters featuring latest news and educational events.