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%.
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.