Global X Funds, the New York-based provider of exchange-traded funds, has launched the Global X Brazil Mid Cap ETF.

This is the first ETF in the world to offer investors targeted access to the rapidly growing medium size domestic Brazilian enterprises.

The fund offers exposure to 40 companies with market capitalisation in the range of USD2bn to USD10bn, and includes names like cosmetics company Natura Cosmeticos, aeronautics company Embraer, real estate firm Cyrela Brazil Realty, mobile tech company Tele Norte Leste, food distributor Hypermarcas, and materials firm Metalurgica Gerdau.

In contrast, currently existing Brazil ETFs may overweight exposure to mega-cap companies, particularly those in natural resources and with global rather than Brazil-based operations.

The ETF tracks the Solactive Brazil Mid Cap Index. It is well diversified across the main sectors of the local Brazilian economy.  The sector breakdown includes 20 per cent utilities, 17 per cent non-cyclical consumer, 16 per cent industrial, 15 per cent financials, 14 per cent basic materials, nine per cent cyclical consumer, and nine per cent communications.

The fund has a 0.69 per cent expense ratio.

"Medium sized Brazilian enterprises offer access to on-the-ground, established businesses that reflect the Brazilian growth story, while staying above a minimum size to avoid excessive risk," says Bruno del Ama, chief executive of Global X Funds. "Such companies are currently sparsely represented in existing exchange traded fund options, yet are poised to benefit the most from the country's solid macro fundamentals. The Brazil Mid Cap ETF provides efficient and diversified access to these localized growth themes."