5 Best Performing Small-cap ETFs in 2023

1. VanEck Brazil Small-Cap ETF (BRF)

Year-to-Date Returns: 27.7%

Topping the list with nearly 28% gains in 2023 is the VanEck Brazil Small-Cap ETF (BRF), which has 102 holdings, providing slightly more exposure to the Brazilian market than EWZS. Its expense ratio is also slightly higher at 0.66%. The fund is relatively top-heavy, with about 40% of its assets invested in its top 15 holdings.

One of those holdings is Ero Copper Corp. (NYSE:ERO), its sixth-largest holding at 2.85% weighting.  The copper producer isn’t overly popular among the smart money, as just ten funds were long ERO on June 30. One fund did add ERO to its portfolio during Q2, that being Dmitry Balyasny’s Balyasny Asset Management.

Softer copper prices impacted Ero Copper Corp. (NYSE:ERO)’s Q2 results, though the company noted that was the result of global economic concerns rather than the fundamentals of the copper industry, which look strong. Demand is rising and should continue to intensify alongside the ongoing global shift towards clean energy sources. Ero Copper is actively planning to meet that growing global demand with new sites, including one at Tacuma in the northern part of the country that is about 50% complete, with production expected to commence by the second half of 2024.

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