Why go abroad and what you can buy
Global ETFs, bonds and REITs
5 min
Individual shares are only one slice of the global menu. Three other vehicles let a Brazilian build a diversified foreign portfolio.
Global ETFs
An ETF (exchange-traded fund) is a fund that trades like a single share but holds a basket of assets — often tracking an index. With one purchase you can own:
- A whole market (a broad US index, a developed-markets index, an all-world index).
- A region, sector or theme.
ETFs are the workhorse of low-cost global diversification. Two routes exist for Brazilians:
- Buying foreign-listed ETFs through an international account (the widest selection, in dollars).
- Buying BDRs of ETFs or local ETFs that track foreign indices on B3, in reais — simpler, but a narrower menu.
Always check the fund's expense ratio (annual cost) and whether it distributes or reinvests dividends, as that affects both returns and how you are taxed.
International bonds (fixed income abroad)
Holding hard-currency debt diversifies away from Brazilian rates and the real:
- US Treasuries — debt issued by the US government, widely treated as a low-credit-risk dollar asset.
- Eurobonds — bonds issued in a currency different from the issuer's home market (the name is about the currency of issue, not necessarily Europe). Brazilian companies and the government issue dollar bonds of this kind.
- Corporate and government bonds of other countries, with credit risk that varies by issuer.
Fixed income abroad still carries interest-rate risk (prices fall when rates rise) and credit risk, plus the currency layer.
REITs — real estate abroad
A REIT (real estate investment trust) is a listed vehicle that owns income-producing property — the foreign cousin of the Brazilian fundo imobiliário. US REITs in particular let you collect rent-driven income from offices, warehouses, data centres or housing abroad, priced in dollars. They typically distribute most of their income, so the dividend-withholding point above applies.
Putting the menu together
Most diversified foreign portfolios are built mainly from ETFs and bonds, with individual shares or REITs added for specific convictions. The right mix is personal — and, again, worth discussing with a qualified adviser.
This content is for educational and informational purposes only and is not investment, financial, tax or legal advice. Trading and investing carry risk, including the possible loss of capital. Any performance shown by third-party tools is hypothetical and not a promise of future results. Do your own research and consider professional advice before making any decision.