VanEck Brazil Small-Cap ETF (BRF)

ETF VanEck Brazil Small-Cap ETF (BRF) Overview

Profile:

VanEck Brazil Small-Cap ETF (BRF) offers exposure to the Brazilian small-cap market. It invests in small-cap companies incorporated in Brazil, across multiple industries.

Objective:

The fund's primary goal is to provide investment results that, before expenses, generally correspond to the price and yield performance of the MVIS Brazil Small Cap Index.

Issuer:

• Name: VanEck
• Reputation: VanEck is a renowned global investment manager with a strong track record and a reputation for innovative investment solutions.
• Management: Experienced team with expertise in emerging market equities and index tracking.

Market Share:

BRF has a market share of approximately 1.2% in the Brazil Small-Cap ETF category.

Total Net Assets:

As of October 27, 2023, BRF has approximately $221.27 million in total net assets.

Moat:

BRF's competitive advantages include:

• Experienced management team: The team has a deep understanding of the Brazilian small-cap market and a proven track record of success.
• Physical replication: The ETF directly invests in the underlying securities, providing investors with greater transparency and tax efficiency compared to swap-based ETFs.
• Liquidity: High average daily trading volume ensures efficient buying and selling.

Financial Performance:

• Historical Returns: BRF has delivered a 3-year annualized return of 8.74%.
• Benchmark Comparison: The ETF has outperformed its benchmark, the MVIS Brazil Small Cap Index, over the past 3 years.

Growth Trajectory:

The Brazilian economy is expected to experience moderate growth in the coming years, which could benefit the small-cap sector.

Liquidity:

• Average Trading Volume: High, with an average daily volume exceeding 200,000 shares.
• Bid-Ask Spread: Tight, typically around 0.05%.

Market Dynamics:

• Economic indicators: Growth in the Brazilian economy, especially in sectors like consumer staples and financials, can positively impact BRF.
• Political stability: Political stability and favorable regulations can support investor confidence and market growth.
• Global market trends: Global commodity prices and broader emerging market performance can influence investor sentiment towards BRF.

Competitors:

• iShares MSCI Brazil Small-Cap ETF (EWZS): Market share of 94.2%
• Xtrackers MSCI Brazil Small Cap UCITS ETF 1C (BRAZ): Market share of 3.8%

Expense Ratio:

The expense ratio for BRF is 0.60%.

Investment Approach & Strategy:

• Strategy: The ETF passively tracks the MVIS Brazil Small Cap Index.
• Composition: The fund primarily invests in stocks of small-cap companies across various sectors in Brazil, including financials, consumer staples, materials, and industrials.

Key Points:

• Provides access to the Brazilian small-cap market.
• Experienced management team and physical replication.
• Outperformed benchmark in recent years.
• High liquidity and tight bid-ask spread.
• Moderate expense ratio.

Risks:

• Volatility: Small-cap stocks can be more volatile than large-cap stocks.
• Emerging market risk: The Brazilian market can be more volatile and less liquid than developed markets.
• Currency risk: Fluctuations in the Brazilian Real against the USD can impact returns.

Who should consider investing:

• Investors seeking exposure to the Brazilian small-cap market.
• Investors with a higher risk tolerance.
• Investors looking for diversification in their emerging market portfolio.

Fundamental Rating Based on AI:

Based on an analysis of financial performance, market position, and future prospects, BRF receives an AI-based fundamental rating of 7 out of 10. This rating considers factors such as the ETF's track record, its competitive advantages, and the potential for future growth.

Resources & Disclaimers:

• Data sourced from VanEck website: https://www.vaneck.com/us/en/investments/etfs/equity/brf/overview
• Morningstar: https://www.morningstar.com/etfs/arcx/brf/performance
• ETF Database: https://etfdb.com/etf/brf/
• Disclaimer: This analysis is for informational purposes only and should not be considered investment advice. Please conduct thorough due diligence before any investment decisions.