Since BZF is a different type of fund than EWZ or BRF, investors should not expect returns that compare to the other two funds. As of July 10, BZF was up 13.55% for the year. For the one-month period ending July 10, the fund was down 1.68%. BZF is not as liquid as EWZ or BRF and has a three-month average daily trading volume of just 65,187. The fund has a 0.45% expense ratio.

Brazil is uniquely positioned to emerge from the global economic slowdown stronger than before. The current government has been aggressive in reforming financial policy and placing countercyclical measures into place. Brazil's top companies have been aggressive in reaching out to the broader global market. The recent unsubscribed IPO of Visanet raised approximately $4.2 billion, with 70% of the investors coming from outside Brazil. The New York Stock Exchange currently lists 31 Brazilian ADRs, with a combined market capitalization of approximately $500 billion.

Unless investors clearly understand the risks and rules of currency trading, I would recommend that they choose equity based ETFs like EWZ and BRF to gain access to Brazil's marketplace. EWZ is already an ETF giant, and BRF will likely grow rapidly in the months to come. Whether investors favor the small-cap (BRF) or large-cap (EWZ) approach, Brazil ETFs would be appropriate as a small investment in a well diversified portfolio.

Investors looking for a broader exposure to emerging markets including Brazil can check out iShares MSCI Emerging Markets Index ( EEM), Claymore/BNY BRIC ( EEB), SPDR S&P Emerging Latin America ( GML) and Vanguard Emerging Markets Stock ETF ( VWO).
At the time of publication, Dion had no positions in securities mentioned.

Don Dion is the publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.

Dion is also president and founder of Dion Money Management, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

If you liked this article you might like

Trader's Daily Notebook: Is a Battered Brazil Worth a Buy?

Advanced Trade: Brazil ETF

Walmart, Alibaba, iShares Brazil, Cisco: How to Trade Thursday's Most-Active Stocks

Thursday's Most Active Stocks

Brazilian Stocks Tumble After Tape Allegedly Shows President Temer Supporting Bribes