Brazil ETFs that target Large and Mid-Cap Brazilian equities continue to drop on heightened economic tension in the largest Latin American economy. iShares MSCI Brazil Capped ETF (EWZ), the largest one with $4.8 billion in assets under management fell by 5.71% on Wednesday. The Brazilian-based It Now IBOVESPA ETF (BOVV11) followed path with a -3.85% loss (in Brazilian real terms).
Overall, local stocks hit a more-than-five-month low on heightening political tensions ahead of elections next year and recent agricultural output blows from extreme weather conditions. The Bovespa Index, Brazil’s main index fell by -3.78% yesterday and -10% since June end.
The political tensions were sparked by the Brazilian President Jair Bolsonaro who slammed the country’s Supreme Court and cast doubt on the integrity of next year’s elections on Tuesday as his supporters rallied in major cities.
The President’s handling of the pandemic outbreak and allegations of corruption sank his popularity and investors worry about his actions towards the already stretched fiscal spending as he tries to rise back in the polls.
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