ETF Offers a Taste of Investing in Brazil

A notable amount of this growth in Brazil's financial sector can be attributed to Brazilian consumers. These days, Brazilians often buy on credit and are able to enjoy a lifestyle once relegated to those in the "industrialized" countries.

However, if you're not be ready to pick up an English-Portuguese dictionary and send your portfolio on a trip to São Paulo, that's perfectly fine because there are other factors worth considering when it comes to investing in the Brazilian economy.

Understand the Region

Brazil's new economic boom doesn't come risk-free. In 2001, investors were shown the ugly side of Latin American economies when Argentina's market collapsed, sending reverberations throughout the region. And while Brazil's economy is certainly showing none of the signs Argentina's did six years ago, it's worth noting that even the fastest rising emerging markets can stumble on their way up.

While Brazil may not be growing as quickly as some of the other BRIC countries (Brazil's economic growth rate is less than that of India and China), it does have a marked advantage: Infrastructure. Of the four BRIC countries, Brazil arguably has the most developed economy. This also means that Brazil is able to be more autonomous in the way it operates, from an economic standpoint.

There are also some barriers to trade in Brazil, namely high taxes and complex regulatory compliance laws. But while these are problems faced by those interested in direct investment in Brazil, if you're an investor interested in a Brazilian ETF, taxes and regulations are more indirect concerns.

Ultimately, many feel that Brazil's prospects outweigh its risks. The fact that Brazilian companies are thriving says enough to scores of investors on its own (Brazilian energy conglomerate Petrobas is up almost 40% this year alone).

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