RIO DE JANEIRO, BRAZIL – In the past, cross-border investment was limited to buying foreign currency, shares listed abroad, or a house in Miami, but this portfolio has become more sophisticated.
Among the factors behind this increase are the downward trend in interest rates (interrupted this year) and the recent political instability. According to the Central Bank, total financial investments abroad amounted to US$61.6 billion from January through August, up 44% compared to the end of 2020. Not even the appreciated dollar cooled this demand for security.
“Investing abroad stopped being a currency protection a long time ago. It is diversification,” says Rogério Pessoa, responsible for BTG Pactual’s wealth management area.
He says that although the Brazilian market is becoming more sophisticated every day, the U.S. offers a much wider range of products. Currently, the bank recommends that very wealthy clients – with more than R$10 (US$1.8) million to invest – allocate 30% abroad. The average for this public is currently between 15% and 20%.
Although turbulent moments, such as the political crisis, encourage people to look outward, the BTG executive says that investment always requires calm. “The important thing, at the end of the day, is to have a balanced portfolio.”
Itaú Unibanco currently has approximately 27% of its clients’ assets invested outside Brazil. Itaú Private Bank director Felipe Nabuco says that this percentage has been rising for obvious reasons. “In the past 10 years, the international market has had a much better performance than in Brazil.”
American brokerage Avenue, in turn, broke records for new accounts and now has 350,000 clients in Brazil. “Today, small investors can have access to the same options as high income investors,” explains partner Alexandre Artmann.