NEW YORK (TheStreet) -- If you're one of the millions of investors who discovered emerging-market investing in the past decade, you know about the investment merits of Latin America. The region is resource-rich, a middle class is starting to emerge, and Brazil will host the 2014 World Cup and the 2016 Summer Olympics.Digging deeper, many countries in Latin America have faster economic growth and less debt than the U.S. As a result, large-cap funds like iShares MSCI Brazil Index Fund ( EWZ), iShares MSCI Mexico Index Fund ( EWW) and the iShares S&P Latin America 40 Index Fund ( ILF) have become popular. A few months ago, Van Eck ventured into small-cap Latin America investing with the Market Vectors Brazil Small Cap ETF ( BZF), which has performed well and attracted assets. Now Van Eck is back again with the Latin America Small Cap Index ETF ( LATM). Brazil, the largest economy in Latin America, has the biggest representation in the new fund, at 42%, followed by Mexico, 23%, Canada, 19% (these are companies that derive at least 50% of their revenue in Latin America), and Chile, 10%. Those countries dominate the iShares S&P Latin America 40 Index Fund. The small-cap fund has little or no exposure in Peru, Colombia, Argentina and Paraguay. That those countries aren't included is unfortunate because they're becoming more globally relevant. There are few familiar stocks in the fund. Pan American Silver ( PAAS), which is headquartered in Canada, has mines all over Latin America. TV Azteca is another. The fund has 81 holdings, charges a net expense ratio of 0.63% and the index underlying the fund yields 2.81%. Latin America Small Cap Index ETF is heaviest in materials, at 26% of assets, a little less than in the large-cap ETF from iShares. The Latin America Small Cap Index ETF's second-largest sector is consumer discretionary, at 22%. It has almost no representation in the large-cap fund. The relevance here is that anyone purchasing the small-cap fund needs to buy into the ascending middle-class theme. Mining is making these countries wealthier and, thus, making mine workers wealthier. With increased income comes increased purchasing power, which should benefit consumer companies. Emerging markets tend to be more volatile than the U.S. According to Market Vectors, the price-to-earnings ratio for the index is 31, which is high in nominal terms. While it's a good bet that Latin America will have better growth, it's crucial to understand the potential volatility and risks that go with high valuations.