This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

BRIC ETFs Sport Small-Cap Look

Stocks in this article: RSXJ BRF SCIF HAO EWZ RSX

NEW YORK ( TheStreet) -- The BRIC nations are popular for both investors and fund providers. Today, the ETF industry lists a wide collection of products designed to allow investors to tap into the markets of Brazil, Russia, India and China from a number of different perspectives.

The field of BRIC-related ETFs was expanded late last week with the launch of Van Eck's Market Vectors Russia Small Cap ETF (RSXJ). The first fund of its kind, RSXJ provides investors with exposure to a diverse collection of small companies based in Russia.

So far, the fund has seen limited interest and is still vulnerable to liquidity issues. I urge investors to hold off on RSXJ until it gathers steam.

Despite my hesitations, the launch of RSXJ marks an exciting event for the BRIC ETF universe. With its introduction, investors can now gain small-cap access to all four BRIC nations. Small companies in Brazil, India, and China can be accessed using the Market Vectors Brazil Small Cap ETF (BRF), Market Vectors India Small Cap ETF (SCIF) and Guggenheim China Small Cap ETF (HAO) respectively.

Small cap BRIC funds have usually been viewed as promising tools for investors looking to target these nations' rapidly growing domestic populations. For instance, the iShares MSCI Brazil Index Fund (EWZ) provides investors with exposure to the largest and most liquid companies based in Brazil and the fund's index is dedicated to large international companies such as Petrobras (PBR) and Vale. Due to their reach across the globe, the performances of these firms are not entirely dependant on the state of Brazil's economy.

The small companies underlying BRF, on the other hand, are more likely to do the bulk of their business with Brazilian customers. Therefore, their performance will be determined based on the strength of the nation's domestic consumer class.

On top of providing investors with strong exposure to its respective nation's domestic population, small cap emerging market ETFs are traditionally viewed as being more volatile than funds designed to capture large cap market leaders. Investors with a tolerance for risk may find the added upside potential attractive.

While some may find small cap BRIC funds attractive substitutes for large cap cousins, it is also possible to use these funds to compliment international exposure. For instance, investors highly confident in the strength of China's markets may want to enhance their exposure to the nation by pairing a large cap fund such as iShares FTSE China 25 Index Fund (FXI) with HAO. By keeping exposure to HAO small, investors can benefit from the fund's upside potential while protecting from the threat of a downturn.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs