Brazil’s policymakers’ fiscal and monetary actions enabled the country to regain its footing in the first half of this year. Leading indicators suggest that the there could be a speedy return to Brazil’s recent growth rates, reports Latin Business Chronicle. (Why this is just the start of the trend).

As the real has picked up its value, other countries and economies are not faring as well. Spain’s economy has lagged most of the other Euro nations, despite the return of investors. That’s despite Banco Santander raising $8 billion – more than three-quarters of which came from international investors – in early October when its local unit made its stock market debut. It was the world’s largest IPO this year. Read more on Spain here.

Brazil’s exports have been strong, thanks to demand from China for soy and iron ore. The improvement is also in part because of improved trade links with Asia and Africa. (Why ties like this are important for future growth.)

With the continued export diversification and active trade policy, along with a large and growing domestic market, the unique structure of Brazil’s economy could keep the country on top. (What else is shifting in Brazil to support economic growth.)

For more stories about Brazil, visit our Brazil category.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 118.4% year-to-date

• iShares MSCI Spain Index (NYSEArca: EWP): up 39.7% year-to-date

• SPDR S&P China (NYSEArca: GXC): up 64% year-to-date

• With a surge in domestic consumption bolstered by optimistic Brazilians, low unemployment and increased wages, Brazil’s economy is projected to grow 9% for the fourth quarter, comments Martin Denholm for Investment U.

• For the full year, Brazil’s GDP is projected to fall between 1% and 1.5% after a major blow to its export market, but the market has shown signs of revival. (Brazil getting lift from China).

• Deputy Trade Minister Welbar Barral expects foreign direct investment to grow 33% in 2010. Moody’s already brought Brazil’s credit rating to investment grade back in September. (Is there an emerging market bubble?)

• Labor Minister Carlos Lupi stated that Brazil’s economy added 230,956 payroll jobs in October, bringing the number of jobs added to more than 1 million this year, reports Isabel Versiani for Reuters. He also expects the number of new jobs will rise to 2 million in 2010. (Brazil’s growing middle class)

• Lupi projects the economy will grow 2% in  2009 and 7% to 8% in 2010 while analysts estimate growth of 0.2% in 2009 and 5% in 2010.

For more information on Brazil, visit our Brazil category.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 121% year-to-date

• Market Vectors Brazil Small Cap (NYSEArca: BRF): up 35.1% in the last three months

Max Chen contributed to this article.

Emerging Global Shares has filed to launch a group of ETFs aimed squarely at the BRIC economies, according to Cinthia Murphy for Index Universe:

Emerging Global Shares INDXX India Infrastructure Index Fund

• Emerging Global Shares INDXX India Infrastructure Index Fund
• Emerging Global Shares INDXX China Infrastructure Index Fund
• Emerging Global Shares INDXX Brazil Infrastructure Index Fund
• Emerging Global Shares INDXX India Mid Cap Index Fund
• Emerging Global Shares INDXX China Mid Cap Index Fund
• Emerging Global Shares INDXX Brazil Mid Cap Index Fund
• Emerging Global Shares INDXX Growing Asia Large Cap Index Fund

Every single company within these funds will have no more than a 10% weighting. Net operating expenses are pegged at 0.85% for each fund. ALPS Advisors is the advisor for each fund, with Emerging Global Advisors LLC the subadvisor. (Read about the widening wealth shift between the United States and emerging markets).

Each fund will invest in securities, ADRs and GDRs of various companies to replicate their respective indexes. A fully replicating strategy will be used to assemble the funds, however, representative sampling may be used, if needed. (The ultimate guide to the BRIC ETFs). You can read the prospectus for the funds here.

The BRIC economies have been standouts this year as the world recovers from the global financial crisis, gaining about 110% since the market’s low. Russia has been one of the strongest, gaining 137% year-to-date. Brazil has gained 117%, China is up about 60% and India has added about 90%.

For more stories about BRIC ETFs, visit our BRIC category.

Chinese factory output growth surged to a 19-month high in October. China, the world’s third-largest economy and a voracious commodities consumer, is widely considered a driver in a global economic recovery, reports Luciana Lopez for Reuters. The numbers gave investors the confidence they were seeking to move toward greater emerging market risk.

President Luiz Inacio Lula da Silva is confident that Brazil’s economy will grow by 5% in 2010 and expects foreign reserves to reach $300 billion, further signaling a recovery for the Latin American country, reports Alex Lawler for Reuters .(Why Brazil is worth considering).

Brazil’s strong pace of recovery is another signal that the rapidly growing country has emerged from a recession; it posted 8%-10% growth in the third quarter, reports Industry Week. (Read about how Brazil’s middle class will help to benefit ETFs).

For more stories about Brazil, visit our Brazil category.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 120.8% year-to-date

• Market Vectors Brazil Small Cap (NYSEArca: BRF): up 29.5% since inception

Some fear that this so-called “mindless money” is being thrown at these markets, distorting valuations and pumping up a potentially monstrous bubble. (Find out how bubbles form and how to avoid them). Several markets, such as Brazil and Peru, are up 100% this year.

Jason Zweig for The Wall Street Journal reports that as money pours into the ETFs, they must mechanically match their holdings to those in the emerging-market indexes. That forced buying drives up stock prices, attracting still more new money into the ETFs, spiraling stock prices even higher.

One issue is that holdings in emerging market ETFs might be too concentrated and not fully reflect the real economy. For example, the manager of iShares MSCI Brazil (NYSEArca: EWZ) notes that Brazil’s market has been top-heavy for years. Two big companies dominate the market.

Even if these assets have led to distortion, ETFs may soon become forced sellers anyway, Zweig notes. Tax rules state that ETFs can’t allow their assets to become over-concentrated in a handful of holdings. In general, they can’t keep more than 25% of their money in a single stock, and at least half of their assets must be in securities that each account for no more than 5% of total holdings.

As a result, the inflows emerging market funds have seen lately could compel some of the largest ETFs to begin selling holdings to come in under the 25% limit. (Why emerging markets should be represented in your portfolio).

For more stories about emerging markets, visit our emerging markets category.

The 10.2% unemployment figure is far worse than what economists had expected, and they don’t see any sign of relief until next year. While the pace of layoffs has slowed, the unemployment rate is continuing to climb, reports Javier C. Hernandez for The New York Times.

Unemployment isn’t just as issue here, either; millions around the world don’t expect to see relief in the form of jobs anytime soon. The European Union forecast unemployment in the eurozone to rise to 10.7% in 2010, up from 9.5% this year. Unemployment ranges from 3.5% in the Netherlands to 18.3% in Spain, reports Greg Keller for the Associated Press. In China, the official urban unemployment rate is 4.3% in the third quarter. Brazil’s unemployment was 8.1% in August, almost unchanged from the previous month.

Gold futures have soared to a record $1,100 an ounce today. While some profit-taking briefly sent gold lower, it resumed its course and analysts expect it to continue to move higher, reports Allen Sykora for The Wall Street Journal. SPDR Gold Shares (NYSEArca: GLD) is up about 0.4% year-to-date. (More on gold can be found here).

Businesses slashed inventories for a record 13th straight month in September, although sales rose for the sixth consecutive time. Many hope that improving sales figures will encourage businesses to start lifting production, although a rising jobless rate heightens fears that consumers won’t start spending anytime soon, reports Martin Crutsinger for the Associated Press. (An ETF to play holiday shopping).

The world’s largest insurer, AIG (NYSE: AIG) reported that it was profitable for the second consecutive quarter. Although things have stabilized, the company’s CEO said that earnings will remain choppy while they restructure.  SPDR KBW Insurance (NYSEArca: KIE) is up about 0.6% this morning.

G20 Finance Ministers are meeting this week to discuss financial reform and economic recovery. While these economies have put in place certain policies in order to push along a recovery, they’re not policies anyone wants to keep in place forever. The general consensus is that it’s too soon to reverse the measures, but it’s not too soon to begin talking about when and how it would happen. Government debt in developed G20 countries is likely to reach 118% of annual national income in 2014, reports Andrew Walker for the BBC.

For more stories on the global economy, visit our global ETF page.

Although the pace may eventually slow down, Barron’s reports that emerging markets still have room left to grow in the long haul. And for the time being, they may be the place to hide out as developed markets still work toward normalcy. In the near-term, growth rates in developed nations are expected to be lackluster, and much less robust than those in the developing world’s. (What you’re missing when you’re not globally invested).

Countries that are resource rich and developing are stockpiling cash and shoring up their balance sheets for a strong recovery and a growth spurt unlike any seen before. Earnings and  economic activity have been revived. Morgan Stanley feels that earnings in emerging markets have bottomed in the third quarter and they’re now set to climb again. (Why frontier markets could be even bigger).

For more stores about emerging markets, visit our emerging markets category.

There are a variety of ways to play emerging markets. There are broad funds, such as iShares MSCI Emerging Markets (NYSEArca: EEM), Vanguard Emerging Markets (NYSEArca: VWO) and iShares MSCI EAFE Index (NYSEArca: EFA).

There are funds that focus on regions, such as Claymore/BNY Mellon BRIC (NYSEArca: EEB) and BLDRSAsia 50 ADR Index (Nasdaq: ADRA).

Finally, there are single-country funds, such as iShares MSCI Brazil (NYSEArca: EWZ) and Market Vectors Vietnam (NYSEArca: VNM).

Keep in mind that the narrower you get in your exposure to emerging and frontier markets, the higher your risk will be. Be sure to have an entry and exit strategy before you invest. (How to follow trends).

Brazil is one step closer to joining the ranks of developed nations: its middle class is growing. For a country long divided between a small, wealthy elite and a vast army of have-nots, it’s a positive development that many believed was a long shot just a few years ago. (An investment upgrade by Moodys is also proof of the stable economy).

Alibaba reports that the true definition of a middle class is hard to define. Brazil uses a five-tier system to classify population by money. The middle tier, called Class C, comprises those with household income between 1,115 and 4,807 reals per month ($641 to $2,763). (What Brazil’s foreign investment tax means). This segment has ballooned to more than half the country’s total population.

The benefits of Brazil’s bigger middle class include:

• Programs have lifted 19 million people out of poverty and into this class
• They’re grabbing status symbols such as televisions and cars; new car sales jumped 20% in September
• The middle class can press for social change, improved schools and stronger political institutions
• They put a higher premium on citizens’ rights, such as multi-party elections and free speech

Mina Kimes for CNN Money reports that unemployment is down from its March peak, wages are up, and the Bovespa index, which tracks the country’s biggest stocks, has climbed 77% so far this year.  (Seven things to like about Brazil).

For more stories about Brazil, visit our Brazil category.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 92.6% year-to-date

• Market Vectors Brazil Small Cap (NYSEArca: BRF): up 64.5% since May inception

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).