Market Vectors Targets Brazil’s Small Caps With New ETF

Market Vectors today has launched a new exchange traded fund (ETF) that seeks to give investors exposure to the small-cap companies  in Brazil. The Market Vectors Brazil Small-Cap (BRF) is designed to give investors access to a variety of areas of growth in Brazil, including the homebuilding and consumer goods sectors. The index consists of names that are domiciled in Brazil or that generate at least 50% of their revenues in the country.

According to a paper by Van Eck about Brazil’s small caps, the following points are noted about the country:

• Domestic consumption in Brazil is on the rise, with a growing middle class. This could favor small-caps, since many of those companies are consumer-focused.
• Brazil is continuing to grow and strengthen, and small-caps are more dependent on this real growth. As long as Brazil keeps improving, its small-caps may benefit.
• Brazil has a young population that is spending money on cars, houses, furniture and technology.

BRF has a 0.73% expense ratio and 52 components. The top sector weightings are consumer discretionary, 31.7%; materials, 15.8% and utilities, 10.7%.