BlackRock's Brazil ETF Sees Biggest Daily Outflow in Nine Months

(Bloomberg) -- Investors pulled about $127 million from the $9 billion iShares MSCI Brazil ETF on Tuesday, the largest single-day withdrawal since August, as traders assessed the recent escalation in global trade tensions and mounting signs of disappointing growth in Brazil.

It was the second day of withdrawals for the EWZ, as the fund is known, signaling an adjustment after its first gain for the month of May -- traditionally bad for emerging markets -- since 2009.

Aberdeen Asset Management Plc’s Peter Taylor said that while recent developments in the domestic scenario have been slightly positive, he needs more clarity on the pension overhaul’s approval to add to his small overweight in Brazil stocks.

“The base case scenario is that it will be difficult to get the reform through Congress,” Taylor said.

Brazil’s benchmark Ibovespa equity index fell as much as 1.5% in Sao Paulo on Wednesday, leading losses in emerging markets.

Investors pulled $313 million from five U.S. listed ETFs dedicated to Brazilian assets over the past week, the second-largest net outflow among emerging markets. Chinese ETFs, which topped losses, suffered a $466 million net outflow in the same span.

--With assistance from Carolina Wilson.

To contact the reporters on this story: Vinícius Andrade in São Paulo at vandrade3@bloomberg.net;Aline Oyamada in Sao Paulo at aoyamada3@bloomberg.net

To contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, Julia Leite, Philip Sanders

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