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New Brazil ETF Focuses on Financials

Global X ETF follows Solactive index


Global X Funds, a New York-based provider of exchange-traded funds and ETF investments, has launched the Global X Brazil Financials ETF (NYSEArca: BRAF).

The Global X Brazil Financials ETF follows the Solactive Brazil Financials Index, which is designed to track the performance of the Brazilian financial sector. The index has 25 holdings and bank stocks like Itau Unibanco, Banco Bradesco and Banco do Brasil are among the largest positions.

The iShares MSCI Brazil ETF (NYSEArca: EWZ), with $9.48 billion in assets, is still the largest Brazil ETF. EWZ contains around 80 stocks and unlike BRAF is a broader measure of Brazilian stocks.

Financial investment in Brazil is expected to grow by 22% annually through year 2020, according to Itau Unibanco. Additionally, Brazil has also been the beneficiary of increased merger and acquisition activity. Dealogic reported M&A transactions in Q1 2010 were worth $37.8 billion and double the deal flow posted a year ago.

“Brazil is establishing itself as the financial center of the region, thanks to strong macroeconomic trends over the past half decade of decreasing fiscal debt and unemployment, rising credit and industrial production,” says Bruno del Ama, CEO of Global X Funds. “Such trends plus favorable projections give a solid platform for financial sector growth going forward. The Global X Brazil Financial ETF provides efficient access to these themes.”

BRAF’s annual expense ratio is 0.77%.

The Brazil Financials ETF part of a family of Brazil ETFs, which includes the Global X Brazil Consumer ETF (NYSEArca: BRAQ) and Brazil Mid Cap ETF (NYSEArca: BRAZ) that were recently introduced. Other members of the fund family yet to launch include the Brazil Industrials, Materials, and Utilities ETFs.

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