The Brazilian political and economic situation has left much of the population discontented and the novelty within this movement is in the increase of remittances of values of the country to the United States according to Central Bank data, the volume sent by individuals in the first half reached US $ 408 million. The figure more than tripled from a year earlier.
This phenomenon is partly explained by the increase in the number of Brazilians who have moved to the United States or even their children who have studied in the country. In search of a better life, Brazilians with financial stability and investments here seek to guarantee their gains in a larger and more reliable market than the one existing in Brazil.
André Algranti, CEO of XP Securities in Florida, noted the strong expansion in the remittance of Brazilian dollars to the United States from January to June with a 51.5% jump in the number of clients and a 61.3% jump in custody amounts in the period.
“The Brazilian currency area has practically doubled in the first half of the year,” says Algranti – who moved to Florida in January – on the company’s adequacy to meet customer demand. Recently, XP Securities hired a specialist in European and North American assets due to the greater demand of Brazilians for these investments.
Even with the Selic cuts that knocked the rate down from 13.75% at the beginning of the year to 9.25% in July, the Brazilian basic interest rate is still very far from the 1% to 1.25% level in force in the United States. This makes the Brazilian investors who immigrated there have to get used to a new reality of financial gain.
“It is natural that the Brazilian is very accustomed to a CDI, for example, to earn high interest without much effort. When he comes here, he looks for similar solutions, “says the executive director of XP Securities.
Even with a much wider range of investment possibilities in the United States – to give you an idea, Apple trades the volume of the entire Brazilian stock market in just one day – Brazilians are also attached to Brazilian companies. Algranti says that it is common for immigrants to look for assets of Petrobras, Itaú and Bradesco, for example.
“One job that we have been doing is precisely to get our clients to invest in assets not related to Brazil. It is important that it be tied to local risks and diversify with European and Asian assets as well. We have tried to rebalance the portfolio, “explains Algranti.
On average, XP Securities’ customer base – which starts to invest from US $ 100,000 – is divided between 10% on the stock exchange, 60% to 70% on fixed income assets and 20% to 30% on investment funds. Within this range of investments, from 30% to 40% of the portfolio is usually allocated to Brazilian assets.
“Before this percentage [of the portfolio allocated in Brazilian assets] was much higher. People already knew these investments and they felt more comfortable. Now, with Brazil’s political situation and Joesley Batista’s accusations, they are beginning to realize the importance of distributing investments, especially in times of crisis, “says Algranti.
Among the preferred assets of Brazilians in the first half of 2017 are the bonds of Santander in Spain, General Motors and Electricité de France. Among the Brazilian bonds, we highlight Petrobras, Itaú and Gerdau. “They are solid companies and people feel confident investing,” explains Algranti.