ETF Spotlight on Market Vectors Brazil Small-Cap (NYSEArca: BRF), part of a weekly series.
Assets: $289.9 million
Holdings: Small-cap companies domiciled and primarily listed on an exchange in Brazil, or companies that generate at least 50% of their revenues in Brazil.
Objective: Tracks the Market Vectors Brazil Small-Cap Index.
What’s Good
- This fund gives exposure to the small-caps of Brazil; small-caps tend to outperform large-caps in periods of recovery, because their small size makes them more nimble.
- Weighted 30% in consumer discretionary, 17.3% in industrials, 16.7% in financials, 12.3% in materials.
- 56 securities make up the index.
- The expense ratio is 0.73%.
The Latest News
- Brazil recently instituted a 2% tax on foreign investment in equities and fixed income (What it could mean).
- With the right mix of policies, Brazil could sustain average annual economic growth of 5% over the next 10 years, according to Goldman Sachs.
- Brazil’s president is being credited with the country’s growth. He has built a foundation of low inflation and sound fiscal policy that has released a tide of investment in Brazil. (Our definitive guide to the BRICs).
- Around mid-2010, Jubak says, the carry trade could begin to unwind and lead investors to pull money out of assets that are currently in favor. But for now, Brazil’s small-caps are benefiting from the carry trade.
- Credit is back to normal levels and the economy is back on stable ground, reports Michael S. Derby for The Wall Street Journal. Brazil’s central bank claims the growth is sustainable, as well.
- The economy has added jobs to payroll and government data indicates companies are hiring workers to meet growing demand for manufactured goods and new homes, reports Isabel Versiani for Reuters.
- Retail sales are up for the fourth month in a row. Sales rose 4.7% in August from a year ago, report Joshua Goodman and Adriana Brasileiro for Bloomberg. Domestic demand indicates that continued economic support will continue.
- In 2010, Brazil’s economy is expected to grow 4.4%; this year, growth is expected to be around 0.12%. (How to play Rio’s Olympic win).
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.