Investing abroad is a way to diversify your portfolio – 09/29/2024 – Market

Investments abroad help to diversify assets and reduce risks even with Brazilian fixed income on the rise, global political instability and the prospect of a cooling of the US economy, according to experts consulted by Sheet.

The path can be taken via the national market and from increasingly smaller amounts. BDRs (Brazilian Depositary Receipts), traded on B3, replicate shares of large companies abroad, such as Google, Apple and Microsoft. There are also ETFs (Exchange Traded Funds), funds that replicate specific market indices.

“Instead of looking for individual shares, the investor buys a basket of assets linked to a benchmark, allowing them to diversify internationally with unique instruments”, explains Cristiano Castro, director of wealth management at BlackRock Brasil.

“ETF BDRs start at a price of R$50, for example. With R$80, you already spread your portfolio across 500 shares in the American market. It’s the simplest way to mix local and international portfolio without needing an account abroad. “

Through them, it is possible to access, for example, North American fixed income, considered one of the safest investments in the world. The attractiveness of US Treasury bonds remains, even after the Fed cut 0.50 percentage points in the country’s interest rates in the middle of this month, starting what is expected to be a cycle of constant easing of interest rate policy, according to Guilherme Suzuki , partner at Astra Capital.

“We view US fixed income positively because we are still at a level of interest rates that the US has not experienced for decades, especially for short and medium-term bonds, up to 10 years, for the most conservative investor”, says Guilherme Suzuki , partner at Astra Capital.

Alessandra Ribeiro, partner and director of macroeconomics at the Tendências consultancy, disagrees. The prospect of continued reduction in interest rates in both the US and Europe may mean that variable income may have more to offer than fixed income in the medium term.

“The variable income market may become more attractive, but investors must bear in mind that there will still be some time to see the impact”, he states.

Agendas such as the American elections should remain on the investor’s radar, according to the expert.

“If Trump wins and manages to implement policies of sharply reducing interest rates and increasing import tariffs, there could be a boost in economic activity in the short term and increase inflation, interest rates and increase the value of the dollar against other currencies. However, in the medium term, it could be a harmful agenda for the US, resulting in lower growth and higher interest rates”, he says.

“With Kamala Harris, we expect more moderate impacts. The effects on interest rates and the dollar should be more contained.”

To invest directly abroad, international brokerage accounts allow the investor to directly trade stocks, ETFs and other assets directly in foreign markets.

International investment is not just about the USA, but there is no way to disregard the American economy as a natural stage even in the face of the prospect of recession, according to Isabela Bessa, an economist specializing in international investments at Warren.

“If the client wants to invest directly in Europe, in a broker there, the market is still somewhat limited and requires more initial resources. But, through the American market, you have access to currencies and different markets. From there, you can trade on the stock exchanges of several countries”.

Administration fees, commonly charged by institutions that mediate the investment, vary depending on the volume of assets and the type of service offered. The investor must check whether the announced yields already discount the fees.

In Brazil, some institutions also require a minimum investment, which can reach R$100,000 for the total portfolio.

Offshore structures are private investment companies set up outside the investor’s country of residence, generally in jurisdictions with different tax treatment. They can be advantageous in terms of succession and tax planning, but they require even higher values ​​and specialized advice.

Experts recommend at least R$1 million invested to offset administration fees and taxes involved.

“By investing via Brazil, you will end up having less concern about tax and corporate issues, which may be more favorable to small investors”, says Carlos Gouveia, lawyer and professor of Commercial Law at the University of São Paulo (USP).

What to consider before investing my assets abroad?

• Turnaround time: International investments require a long-term horizon and it is a common mistake to repatriate resources when the dollar falls, according to experts. The ideal is to maintain the strategy, making regular contributions to obtain a favorable average price in the long term;
• Amount available to be invested: Consider your financial capacity before investing. Assess whether the amount available is adequate for efficient diversification and building the emergency reserve;
• Risk aversion: understand your risk profile before choosing international assets and consider whether it makes sense for your investment strategy to protect against local instability;