This Brazilian ETF May Have To Make Changes With It’s Top Holding

change“Vivendi surprised the market late last week when the firm announced that it had outbid Spain’s Telefonica (TEF) for Brazil’s GVT. ETF investors holding the Market Vectors Brazil Small Cap ETF (BRF) will need to play close attention to how this deal pans out, as GVT is the fund’s largest holding, making up nearly 6% of the fund. A shakeup in the fund’s holdings may soon be in the cards,” Don Dion Reports From The Street.

“Earlier this year, two of BRF’s top holdings, Sadia and Perdigao, were removed from the fund’s holdings when they joined to become Brasil Foods (PDA), a firm too large to meet the index’s small-cap requirements. If GVT were to merge with Vivendi, the firm would probably be dropped from the index for the same reason,” Dion Reports.

“On Monday, BRF rallied nearly 2.5% on the global rally, as shares of GVT were bid higher in the past couple of months. Vivendi’s stock price, on the other hand, took a hit as investors feared that the firm’s offer is too high,” Dion Reports.

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Here’s a look at the Market Vectors Brazil Small Cap ETF (BRF):

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 ( 38.58% OF TOTAL ASSETS)  
 
Company Symbol % Assets
B2W VAREJO -ON NM BTOW3.SA 3.45
Banco do Estado do Rio Grande do Sul N/A 2.57
BR MALLS PAR-ON NM BRML3.SA 3.77
GAFISA -ON NM GFSA3.SA 3.94
GVT HOLDING -ON NM GVTT3.SA 4.86
LLX LOG -ON NM LLXL3.SA 3.9
LOJAS RENNER-ON NM LREN3.SA 5.08
MRV -ON NM MRVE3.SA 4.7
PDG REALT -ON NM PDGR3.SA 3.51
TOTVS -ON NM TOTS3.SA 2.8

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

 

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