Brazil is now officially out of recession.

The Brazilian economy grew by 1.9% in the second quarter from the first quarter. Economists had been expecting growth of 1.7%.

So, as of today, September 11th, I'm buying shares of the consumer stock-oriented Market Vectors Brazil Small-Cap ETF (NYSEArca: BRF) in my Jubak's Picks portfolio with a target price of $44 a share by June 2010.

In exiting the global recession, Brazil joins a very small group of countries that have seen growth turn positive after dropping into negative territory. Germany and France have also seen growth turn positive in the second quarter. A few other countries in the world, such as China, Indonesia, and India, never saw growth turn negative at all. The World Bank projects that the global economy will contract by 1.4% in 2009.

What's most impressive to me about Brazil's rebound is its balance. Yes, Brazil's export sector, driven by the boom in commodities such as iron ore, has led the recovery. In August, Brazil's trade surplus hit $20 billion for 2009. That's an 18% increase over the first eight months of 2008.

But it took the country's domestic consumers to put it back in the black. Spending by Brazilian families increased by 2.1% in the second quarter from the first quarter of the year. It looks like six straight months of job growth, plus tax breaks and record low (well, low for Brazil anyway) borrowing costs have produced a real recovery in the domestic economy.

In that way, Brazil is ahead of countries such as China that have built their recoveries on infrastructure spending and capital investment and are still hoping that consumer spending will grow.

If you want to buy a piece of the Brazilian economy, US investors have two distinctly different choices.

First, you could buy the iShares MSCI Brazil Index ETF (NYSEArca: EWZ). This exchange traded fund, with about $9.5 billion in total assets, has 50% of its portfolio in Brazil's big energy, mining, and steel producing companies, according to Morningstar.

This is the way to go if you want to own Brazil's commodities and export sectors. You can find more on two stars of those sectors—Petrobras (NYSE: PBR) and Vale (NYSE: VALE)—in the following blog entries on JubakPicks.com.

Head to Head: Petrobras vs. StatoilHydro

Update: Vale (VALE)

Second, you could buy shares of the much, much smaller (just $206 million in total assets) BRF. This fund targets medium-sized and small companies that get at least 50% of their revenue from the domestic Brazilian market. (Average market capitalization of the fund's holdings is $1.65 billion, according to Morningstar. Average market cap at EWZ is $33.3 billion.)

As a result, about 40% of the fund is invested in shares of consumer discretionary and consumer staples companies that sell to Brazilians. (You can find more about BRF here.)

At this point in the global economic and stock market cycles, I'd go with the domestic stuff. Shares of companies in Brazil's commodities and export sectors have already soared, and it looks as if the country's strong currency, the real, is taking some of the steam out of exports.

On the other hand, I think Brazil's domestic recovery is just getting started.

(Full disclosure: I own shares of iShares MSCI Brazil Index in my personal portfolio. I will buy shares in the Market Vectors Brazil Small-Cap ETF three trading days after this is posted.)