Van Eck Global expanded its suite of Market Vectors exchange-traded funds Thursday with the launch of the Brazil Small-Cap ETF (NYSE Arca: BRF), the first Brazilian small-cap ETF available in the world.

The fund invests in Brazil-listed companies with market capitalizations between $250 million and $3.8 billion. That's a relatively wide band, and strays into territory that some may consider mid-caps.

Still, compared with competing Brazilian ETFs like the iShares MSCI Brazil ETF (NYSE Arca: EWZ), BRF has a pronounced small-cap tilt: BRF has a weighted average market cap of $1.4 billion, compared with $28.4 billion for EWZ.

At launch, BRF fund held 52 positions. On an industry basis, its heaviest weights were in household durables (15.6%), food products (9.2%), specialty retail (7.8%) and paper and forestry products (7%).

That compares sharply with EWZ, which is largely focused on energy, materials and banks.

The case for investing in small-cap emerging market companies is that they tap into the entrepreneurial zeal of the population, and can benefit sharply from change and growth in a society. 

The introduction of ETFs specializing in small-cap exposure on a country-specific level in emerging markets began last year. That was led by the launch of the Claymore/AlphaShares China Small Cap Index ETF (NYSE Arca: HAO) in January 2008. 

After a slow start, HAO has gained ground recently and now has about $41 million in assets.

Part of the reason for such strong growth of late can probably be traced to the ETF's relative outperformance. Heading into Thursday, the ETF had returned 34.51% so far this year. By comparison, the most popular large-cap China ETF, the iShares FTSE/Xinhua China 25 (NYSE Arca: FXI), was up some 15.43%, according to Morningstar.

Van Eck no doubt hopes that BRF will offer similar opportunities in the Brazil space. The fund charges 0.73% in expenses. 

The prospectus is available here.