Van Eck Cuts Fee On Brazil ETF BRF 4.8%

September 30, 2011

Van Eck, the New York-based money management firm behind the Market Vectors family of ETFs, lowered expenses on its Market Vectors Brazil Small Cap ETF (NYSEArca: BRF) by 4.8 percent, effective immediately.

BRF now charges 0.59 percent in net annual expense ratio, compared with 0.62 percent previously. The fund, launched in the spring of 2009, tracks a proprietary index comprising small-cap companies that are either listed on a Brazilian exchange or that derive at least 50 percent of their revenues from Brazil. It has $615.7 million since inception, according to data compiled by IndexUniverse.

By contrast, its main competitor in the Brazil small-cap space, the iShares MSCI Brazil Small Cap ETF (NYSEArca: EWZS), costs 0.65 percent. EWZS, which came to market a year ago, has amassed $53 million in assets.

Small-cap stocks are generally seen as giving investors access to domestic economic activity, and small-cap strategies are increasingly popular in the ETF industry. Fund sponsors look to provide investors with growth possibilities, particularly in the developing world, where nascent middle classes have growing buying clout.

The reduced fees are often a result of economies of scale, and in this case will stay in place at least through May 1, 2012. But they exclude certain expenses such as interest, Van Eck said in a press release.

“Keeping shareholder costs down is a priority for us, and as opportunities like this present themselves, we will continue to look for ways to absorb operating expenses going forward,” Van Eck’s principal Jan van Eck said in the release.

Van Eck, which manages nearly $35 billion in assets through its extensive lineup of Market Vectors ETFs, has slashed fees before, reducing overall costs on its Indonesia ETF (NYSEArca: IDX) and Poland ETF (NYSEArca: PLND) earlier this year.

 

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