Van Eck Global launched the first Brazilian small-cap ETF available to investors this week. The new ETF, which is traded on the NYSE Arca Exchange under the ticker BRF, seeks to replicate the performance of the Market Vectors Brazil Small-Cap Index. According to Van Eck, BRF will invest in Brazilian companies with a market capitalization between $250 million and $3.8 billion, a surprisingly large range that borders on mid-cap levels.
At launch, BRF held 52 investments across a number of industries, with its heaviest concentrations in household durables (15.6%), food products (9.2%), and specialty retail (7.8%). As presented by Van Eck, the case for investment in Brazilian small-cap equities is based on:
- Well-developed agriculture, mining, manufacturing, and service sectors
- Improved stability in recent years
- Strong domestic demand and an active export policy
- Sound macroeconomic policies and high levels of international reserves
- Reduced public debt