Brazil tax could add to ETF cost

Global Trends Investments president Tom Lydon says the tax could show up in the form of higher expense ratios, or as a premium to the net asset value. He says: "But it's up in the air as to how this cost will ultimately be passed on to ETF investors." Lydon adds the Market Vectors Brazil Small-Cap ETF has an expense ratio which is capped at 0.79% until May 2010, meaning the tax would not show up as a higher expense ratio before then. He explains the iShares Brazil ETF and the Market Vectors Brazil fund are cash-create products, where cash is taken in lieu of actual shares and is then ...