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Foreign markets are a new opportunity for small investors in Brazil

Published on Oct. 5, 2012

 
Foreign markets are a new opportunity for small investors in Brazil

Few years ago, investing abroad was an option only for large assets. The Brazilian banks are however starting to give an opportunity for small assets to acquire shares from funds investing in foreign markets. This means that investors holding at least 5,000 reais may purchase corporate debt and stock offers from multinational companies.

In the last three years, the number of funds investing abroad has gone from 90 to 237, and the sum of foreign investment has gone from 2,000 to 10,400 million reais.

The key factor of this change has been the sharp fall in domestic market interest rates. Although this fall made easier the access to credit and financing, it also made it less attractive investing in fixed-income deposits, which offered until recently high interest rates around 20 % and, therefore, dissuaded from foreign investment.

For the moment, the CVM only allows investing 20 % of the assets in foreign funds, while it allows investing 100 % of the assets only in super-qualified funds aimed at professional investors, since the complex and therefore risky nature of these investments makes it inappropriate for the general public.

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