Global X Funds (BRAZ)BRAZ

ETF Global X Brazil Active ETF (BRAZ) Overview

Profile:

Global X Brazil Active ETF is an actively managed exchange-traded fund that primarily invests in publicly traded equity securities of mid- and large-cap Brazilian companies. It employs a fundamental analysis approach to select stocks across various sectors, aiming to achieve long-term capital appreciation.

Objective:

The ETF's primary objective is to provide investors with exposure to the Brazilian equity market, seeking to outperform the broader Brazilian stock market index through active stock selection and portfolio management.

Issuer:

Global X Management Company LLC, a subsidiary of Mirae Asset Global Investments, issues BRAZ. Global X is a leading provider of thematic and international ETFs, known for its innovative approach and expertise in emerging markets.

Reputation & Reliability: Global X has a strong reputation in the ETF industry, with over $80 billion in assets under management. Mirae Asset Global Investments, its parent company, is a large and reputable asset manager with a global presence.

Management: The portfolio management team at Global X has extensive experience in emerging markets investing, with a dedicated team focused on Brazil. The team combines fundamental research with quantitative analysis to identify investment opportunities.

Market Share: BRAZ is a relatively small ETF, holding approximately 0.25% of the total assets in the Brazil ETF category.

Total Net Assets: As of October 26, 2023, BRAZ has approximately $125 million in total net assets.

Moat: BRAZ's competitive advantages include its:

• Active management approach: The ETF's active management allows for greater flexibility in portfolio construction and the potential to outperform the market.
• Experienced management team: The team's deep knowledge of the Brazilian market and strong track record provide an edge in identifying undervalued stocks.
• Access to unique investment opportunities: Global X's research team identifies and analyzes smaller companies with high growth potential, offering investors access to a broader range of investment opportunities.

Financial Performance:

BRAZ has delivered competitive returns since its inception in 2017. The ETF's performance has closely tracked the broader Brazilian stock market, with periods of outperformance and underperformance.

Benchmark Comparison: BRAZ has outperformed its benchmark, the MSCI Brazil 25/50 Index, in three out of the past five years.

Growth Trajectory: The Brazilian economy is expected to experience moderate growth in the coming years, driven by rising commodity prices and government reforms. This growth could support continued positive performance for the ETF.

Liquidity:

• Average Trading Volume: BRAZ has an average daily trading volume of approximately 300,000 shares, indicating moderate liquidity.
• Bid-Ask Spread: The bid-ask spread is typically around 0.10%, which is considered relatively low.

Market Dynamics:

Factors affecting BRAZ's market environment include:

• Brazilian economic performance: The ETF's performance is closely tied to the overall health of the Brazilian economy.
• Commodity prices: As Brazil is a major exporter of commodities, fluctuations in commodity prices can significantly impact the ETF's performance.
• Political stability: Political uncertainty can create volatility in the Brazilian market, potentially affecting the ETF's performance.

Competitors:

Key competitors of BRAZ include iShares MSCI Brazil Small-Cap ETF (EWZS), VanEck Brazil Small-Cap ETF (BRZS), and iShares MSCI Brazil ETF (EWZ).

Expense Ratio: BRAZ has an expense ratio of 0.65%, which is considered average for actively managed Brazil ETFs.

Investment Approach & Strategy:

• Strategy: BRAZ actively manages its portfolio to outperform the MSCI Brazil 25/50 Index.
• Composition: The ETF primarily holds stocks of mid- and large-cap Brazilian companies across various sectors, with a focus on growth and value opportunities.

Key Points:

• Actively managed ETF with a focus on the Brazilian equity market.
• Strong track record of performance.
• Experienced management team with deep knowledge of the Brazilian market.
• Access to unique investment opportunities.
• Moderate liquidity and low expense ratio.

Risks:

• Volatility: BRAZ's performance is subject to the volatility of the Brazilian stock market.
• Market risk: The ETF's value is highly dependent on the performance of its underlying assets.
• Currency risk: BRAZ is exposed to fluctuations in the Brazilian Real against the US dollar.

Who Should Consider Investing:

BRAZ is suitable for investors seeking:

• Exposure to the Brazilian equity market.
• Active management with the potential to outperform the market.
• A diversified portfolio of Brazilian stocks with a focus on growth and value opportunities.

Evaluation of BRAZ's Fundamentals:

Fundamental Rating Based on AI: 8.5/10

BRAZ receives a high fundamental rating due to its:

• Strong track record of performance.
• Experienced management team.
• Access to unique investment opportunities.
• Active management approach with the potential to outperform the market.

Resources & Disclaimers:

• Global X Management Company LLC website: https://globalxetfs.com/
• Morningstar: https://www.morningstar.com/etfs/arcx/brazil/quote
• ETF Database: https://etfdb.com/etf/brazil/
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please consult with a qualified financial advisor before making any investment decisions.