This Week in Emerging Market Volatility – 3/21/2014

The Brazilian market showed signs of hope last week with the iShares MSCI Brazil Capped ETF (EWZ – 41.67) rising more than 6%.  The result for EWZ implied volatility was a drop, but the CBOE Brazil ETF Volatility Index (VXEWZ – 29.49) was down 12% but still close to 30 which still indicates a bit of concern.  Do remember markets climb a wall of worry and VXEWZ near 30 indicates worry.  The rest of the emerging markets popped as well with the iShares MSCI Emerging Markets ETF (EEM – 38.98) gaining about 1.5%.  VXEEM dropped accordingly, losing over 14% and the curve adjusted moving from textbook backwardation to contango.

VXEEM VXEWZ

As I write this I’m sitting at the CBOE booth at TD Ameritrade’s Market Drive event in New York.  The good people from iShares are next to me and made me aware of a pretty fun promotion that have going on.  Most people are focusing on their NCAA brackets right now and my understanding is that as of last night 16 people still had a shot at taking $1 billion of Warren Buffett’s money.  I didn’t take a shot at that, but am considering participating in iShares Fund Frenzy contest.  For a donation of $1 (which goes to charity) you can set up a portfolio of 5 iShares single country exchange funds by May 5th.  The best performer wins $20,000 for the charity of their choice.  More info can be found at www.isharesff.com/td.