Things Are Heating Up With The Brazilian ETF’s

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October 15, 2009 8:37pm ETF BASIC NEWS NYSE:BRF

brazilian-map“The fundamentals are improving in Brazil—but right now, global cash flows are driving emerging market stocks. In the long run, I want Brazil in my portfolio because of those improving


 fundamentals. In the short run, I want to own Brazilian stocks because global cash is flowing their way. In the intermediate term, though—say, nine months from now—I want to get increasingly cautious as the US Federal Reserve moves towards raising US interest rates. Right now, all that adds up to a new higher target price for Market Vectors Brazil Small-Cap ETF (NYSEArca: BRF),” Jim Jubak Reports From The Money Show.

Jubak Continues “First, the fundamentals. On October 14, Goldman Sachs economist Jim O’Neill said that with the right mix of policies, Brazil could sustain average annual economic growth of 5% over the next ten years. That’s a step up from Goldman’s prior projections of 4% to 4.5% growth and a huge jump from the days when Brazil struggled to get annual growth of 3% and badly lagged India and China”…..

…..”So, in the near term, I think I’m going to hold onto my position in the Market Vectors Brazil Small Cap ETF and up my target price. I picked this ETF over the much larger iShares MSCI Brazil Index ETF (NYSEArca: EWZ), because the Market Vectors ETF is weighted toward small and medium-sized companies in Brazil’s domestic consumer sector, while the iShares ETF is weighted toward Brazil’s commodities and export giants,” Jubak writes.

See Full Story: HERE

Here’s a closer look at the two ETF’s listed:

The investment (BRF) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the Market Vectors Brazil Small-Cap Index. The fund normally invests at least 80% of assets in securities that comprise the Market Vectors Brazil Small-Cap Index. It may also utilize derivative instruments, such as swaps, options, warrants, futures contracts, currency forwards (and convertible securities and structured notes), and participation notes to seek performance that corresponds to the Brazil Small-Cap Index. The fund is nondiversified.

TOP 10 HOLDINGS (BRF) ( 37.73% OF TOTAL ASSETS)  
 
Company Symbol % Assets
B2W VAREJO -ON NM BTOW3.SA 3.45
BR MALLS PAR-ON NM BRML3.SA 2.94
COSAN LIMITED CL A CZZ 3.65
DURATEX -PN N1 DURA4.SA 3.01
GAFISA -ON NM GFSA3.SA 4.35
GVT HOLDING -ON NM GVTT3.SA 4.08
LOJAS RENNER-ON NM LREN3.SA 4.94
MRV -ON NM MRVE3.SA 4.56
PDG REALT -ON NM PDGR3.SA 3.14
Votorantim Pulp and Paper Inc. N/A 3.61

Chart for Market Vectors Brazil Small-Cap ETF (BRF)

The investment (EWZ) seeks to provide investment results that correspond generally to the price and yield performance of publicly traded securities in the Brazilian market, as measured by the MSCI Brazil index. The fund normally invests at least 95% of assets in the securities of its underlying index and in ADRs based on the securities in its underlying index. It uses a representative sampling strategy to try to track the index. The index consists of stocks traded primarily on the Bolsa de Valores de So Paulo. It is nondiversified.

TOP 10 HOLDINGS (EWZ) ( 61.37% OF TOTAL ASSETS)  
 
Company Symbol % Assets
BRADESCO -PN ED N1 BBDC4.SA 5.06
AMBEV -PN AMBV4.SA 3.13
Companhia Siderurgica Nacional N/A 2.81
Gerdau SA N/A 2.25
Itau Unibanco Banco Multiplo N/A 8.2
ITAUSA -PN N1 ITSA4.SA 2.17
Petroleo Brasileiro SA (Preference) N/A 12.08
PETROBRAS -ON PETR3.SA 10.56
VALE -PNA N1 VALE5.SA 8.77
VALE S.A. ADS VALE 6.34

Chart for iShares MSCI Brazil Index (EWZ)

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