iShares MSCI Brazil ETF draws a record $700 million in one day

The iShares MSCI Brazil ETF attracted $700 million, or about 3.5 billion Brazilian reais, in new capital on Monday, October 5. This marked the largest daily inflow in the fund's 25-year history. Trading volume reached $8.2 billion on the same day, setting another all-time record following the results of Brazil's presidential election first round.

The election results showed candidate Flávio Bolsonaro ahead of President Lula, with the runoff set for October 25. Shares of the ETF surged 12.54% on Monday and touched an intraday high of $43.90 before closing at $42.98. On Tuesday, October 6, the fund traded down 0.1% at $42.94.

The fund's daily trading volume ranked third across all exchange-traded funds, trailing only instruments that track the S&P 500 and the Nasdaq. Eric Balchunas, ETF specialist at Bloomberg, noted that the previous trading record took place in 2018 when Jair Bolsonaro was elected president.

Options specialist Luciano Sousa pointed out that open interest had concentrated around call options with strike prices of $42 and $43. The surge prompted broad option exercises that intensified cash-market buying. Trading also spiked on Brazil's local stock exchange, where B3 logged 103.3 billion reais in volume on Monday compared with its year-to-date daily average of 32.6 billion reais.