Of the ten U.S. hedge funds who held a combined almost $2 billion in Brazilian assets and ETFs (Exchange Traded Funds), as of March 2017, the largest allocations were in publicly quoted bank Itau Unibanco, state-run energy company Petroleo Brasil and iShares MSCI Brazil Capped ETF, according to Bloomberg data.

However, Ross Teverson, head of emerging market strategy, said that the recent shake up would likely dissipate, creating value in the long-term.

“Questionable governance has held Brazil back for a number of years and, while the ongoing corruption investigations create short-term uncertainty, there is a much greater longer-term payoff for Brazil if the new reality is that politicians and companies can no longer break the law with impunity,” Teverson told CNBC in an email.

Going forward, UBS said it recommends sticking to “high quality names”, preferably exporters with U.S. dollar earnings and strong balance sheets. Such names include Brazilian brewery business AmBev, telecommunications company Telefonica Brasil, paper exporter Klabin and food conglomerate BRF.