Watch Out For Changes In Brazil Small Cap ETF (BRF)
The Market Vectors Brazil Small Cap ETF (NYSE: BRF) has been a stout performer in 2009 and is one of the ETF Professor's favorite emerging markets ETFs, but there may be some changes afoot that investors should watch for.
Last week, Vivendi announced it would outbid Spain's Telefonica (NYSE: TEF) for Brazil's GVT, the second-largest holding in BRF. BRF shot up 2.5% on Monday on news of Viviendi's bid.
If GVT is acquired, it would be removed from the ETF and Vivendi would not replace because Vivendi is too large and not a Brazilian company.
The ETF is up nearly 90% year-to-date, so it is obviously prone to move regardless of this acquisition, but don't buy BRF as an acquisition play. Buy it because Brazil is one of the strongest emerging markets to invest in.
