Tag Archives: BRF

Global X Launches 1st Brazilian Mid-Cap Fund

For those of you looking for extreme asset allocation in emerging markets, Global X says its new ETF is the first in the world to offer targeted access to medium-sized Brazilian companies.

The Global X Brazil Mid Cap ETF (BRAZ) tracks the Solactive Brazil Mid Cap Index, which holds 40 companies with market capitalizations between $2 billion to $10 billion. The fund, which launched Tuesday on the NYSE Arca, charges a 0.69% expense ratio. These are the top holdings: cosmetics company Natura Cosmeticos, aeronautics company Embraer, real estate firm Cyrela Brazil Realty, mobile tech company Tele Norte Leste, food distributor Hypermarcas, and materials firm Metalurgica Gerdau.

The Brazilian market sector breakdown:

  • Utilities 20%
  • Non-cyclical consumer 17%
  • Industrial 16%
  • Financials 15%
  • Basic Materials 14%
  • Cyclical Consumer 9%
  • Communications 9%

“Medium sized Brazilian enterprises offer access to on-the-ground, established businesses that reflect the Brazilian growth story, while staying above a minimum size to avoid excessive risk,” says Bruno del Ama, CEO of Global X Funds, in a written statement. “Such companies are currently sparsely represented in existing exchange traded fund options, yet are poised to benefit the most from the country’s solid macro fundamentals. The Brazil Mid Cap ETF provides efficient and diversified access to these localized growth themes.” He added, “in contrast, currently existing Brazil ETFs may overweight exposure to mega-cap companies, particularly those in natural resources and with global rather than Brazil-based operations.”

With Brazil Mid Cap as the first member, the New York-based ETF provider plans to launch a family of ETFs tracking Brazilian industry sectors such as consumer goods, financial services, industrials, basic materials, and utilities.

Comparatively, the iShares MSCI Brazil (EWZ) gives exposure to large commodity producers exporting products world-wide, while the Market Vectors Brazil Small-Cap (BRF), follows the small-caps, obviously.

According to ETF Trends, “Brazil’s economy grew 9% in the first quarter, and for the 14th consecutive week, analysts have raised their forecast for yearly economic growth in the country. As a result, the country’s central bank is expected to raise interest rates accordingly. The country’s growth is forecast to slow next year, however, to 4.5%.”

Van Eck Wins Most Innovative at Global Awards

Van Eck Global’s ETF family, the Market Vectors, won the Americas award for Most Innovative ETF at the 6th Annual Global ETF Awards. It was the second year that the ETF industry chose Market Vectors for most original new fund. Last year, it shared the award with PowerShares Invesco, but this year it alone received the most votes. IndexIQ and ProShares tied for second place, while ETF Securities, ProShares and Pimco tied for third.

Unfortunately, voters don’t need to specify which fund they feel is most innovative, just the sponsoring house. So, we are left to guess which fund was most innovative. I think a nice change for next year would be for voters to specify which fund should win the award.

Last year, Market Vectors released:

Brazil Small-Cap ETF (BRF)
Indonesia Index ETF (IDX)
Junior Gold Miners ETF (GDXJ)
Poland ETF (PLND)
Vietnam ETF (VNM)
Pre-Refunded Municipal Bond ETF (PRB)
High-Yield Municipal Bond ETF (HYD)

While there’s no indication which the industry found most innovative, the Junior Gold Miners and Brazil Small-Cap ETFs gathered the most assets last year.

In 2008, when Market Vectors tied for first, it released the Double Short Euro exchange-traded note (DRR). This has proven very popular in the last week, posting an average daily volume of 300,000 shares vs. the previous average of just 40,000 a day.

Hedge Fund ETF and Deutche Bank’s db x-trackers won Most Innovative ETF for Europe and S&P CNP500 Fund took top prize in Asia. Deutsche Bank won Most Useful ETF Research for both statistical and analytical in the Americas. BlackRock’s Deborah Fuhr, one of the industry’s leading analysts, won both research awards for Europe.

The Global Awards, run by exchangetradedfunds.com, are the Oscars of the ETF industry because as its slogan says it’s “How the industry measures excellence.” Like the Oscars in which only actors are allowed to vote for Best Actor and only directors are allowed to vote for Best Director, only ETF industry insiders are allowed to vote for the Global Awards. So, when your competitors vote for your fund over their own, you know you’ve done something special. The Capital Link awards, comparatively, are chosen by 14 industry analysts.

While Europe, Asia and the Americas win an award in each category, I’m just focusing on the Americas.

Most Recognized Brand went to both iShares and SPDR. In recent years, SPDR monopolized the award due to its TV ad campaign with animated spiders making webs in the shape of industrial icons. It clearly affixed the SPDR brand with investments. iShares, the ETF market leader, fought back this year with a campaign to that instilled in investors minds iShares as a good way to invest. SPDRS.com won Most Informative ETF Website, with ishares.com coming in second.

Other awards

Most Innovative ETF Hybrid Product — iPath S&P 500 VIX Short-Term Futures ETN (VXX) This one has also been very popular recently.

The ETF that raised the most assets in 2009 — iShares MSCI Emerging Markets Index Fund (EEM)

The ETF that raised the most assets in 2009 — Direxion Daily Emerging Markets Bull 3x Shares (EDC).

The most liquid ETF (based upon daily USD turnover)– SPDR S&P 500 (SPY)

The Exchange that has the largest number of Primary ETF listed products — NYSE Arca

For the full awards list go to exchangetradedfunds.com click on Winners-6th Annual Global ETF Awards.