EWZ (iShares MSCI Brazil Capped, Expense Ratio 0.62%) has stutter-stepped in recent sessions and the fund has seen about $100 million flow out in the trailing one month period.
Trading as high as $37.53 on an intraday basis nine trading sessions ago, the fund is back in the low $36’s, and with trading in the May 35 put line once again in the marketplace, it has us looking at the only “Inverse” Brazil equity ETF that is listed in the U.S., BZQ (ProShares UltraShort MSCI Brazil, Expense Ratio 0.95%).
The fund is rather small, with only $27 million in assets under management when compared to EWZ’s substantial $3.4 billion asset base, and some time ago competing issuer Direxion also offered a levered/inverse Brazil Equity product known as BRZS, but the fund has since been de-listed.
On the other hand, Brazil bulls can choose from both BRZU (Direxion Daily Brazil Bull 3X, Expense Ratio 0.95%) as well as UBR (ProShares Ultra Brazil, Expense Ratio 0.95%) as even with the weakness in the past couple sessions, Brazil has still demonstrated significant out-performance when compared head-to-head with the MSCI Emerging Markets Index in the trailing one month period, in fact by a factor of almost eight. EWZ is the largest Brazil Equity ETF in the U.S. listed landscape by a mile, with $3.4 billion in AUM, dwarfing its next largest competitor BRF (Market Vectors Brazil Small Cap, Expense Ratio 0.60%) which only has $102 million in AUM.
Following BRF there is a rather sharp drop-off in fund sizes in terms of assets under management, as the next largest fund happens to be previously mentioned BRZU which has about $53 million in AUM, and then there
are nine substantially smaller ETFs in the space, many with less than $10 million and some with less than $5 million in assets under management, ranging from specific equity sub-sectors in Brazil such as “Consumer,” “Infrastructure,” and “Financial,” as well different market caps outside of large/mega cap.
EWZ of course is rather heavily slanted to the Mega/Large Cap space, with greater than 64% of the overall portfolio residing in these market caps, with the highest exposure in Financial Services (23%) and Consumer Staples (19%). Top holdings are Itau Unibanco Holding S.A. (>10.13%), Ambev SA (>8.43%), Banco Bradesco SA (7.62%), Petroleo Brasileiro SA Petrobras (4.96%), and BRF SA (4.03%).