Questions from a brazilian investor

For investors outside the US. Personal investments, personal finance, investing news and theory.
Sister forums: Canada, Spain (en español)
---------------
Post Reply
Topic Author
El_Duderino
Posts: 1
Joined: Fri Nov 06, 2020 9:45 pm

Questions from a brazilian investor

Post by El_Duderino »

Hey, Bogleheads!

I'm fairly new to equity investing but very luckily came across Jack Bogle's work and the Bogleheads guide early into this new venture. I'm in my early to mid 20s and was thrilled to see how your approach can massively benefit those who use their youth as an advantage to pave their own way towards financial independence - but there is one problem: living in Brazil, I can't exactly engage in the book's suggested course of action.

Although the Boglehead strategy is also undeniably valuable as a concept, living outside of the US and not having any pior experience can make it quite challenging to translate it's methods into my country's investment opportunities, and so I've been tirelessly reading up on endless alternatives, which I think is causing me to experience what the guide, according to behavioral economics, calls paralysis by analysis.

Anyway, there are some questions I've had in my mind that I'd very much appreciate some help with in order to finally get my financial plan in order. So here it goes:

REGARDING ETFs

Having no direct access to decent no load index mutual funds, are ETFs the best way to go?

Do I make an initial investment in ETFs according to my asset allocation, increment it monthly and rebalance when necessary only to cash out upon retirement?

If ETFs are index fund traded on exchanges and, in the long haul, markets go up, will the shares' value (and my ongoing position) skyrocket decades from now when I sell? Does the spread strongly affect me? Are there splits?

Having read up on the wonders of foreign domiciled ETFs as a tax savvy way to go, how do I account for the currency risk involved in investing in foreign assets? For instance, here we have an ETF called IVVB11, which is essentially Blackrock's IVV (tracks S&P 500) offered in our stock exchange with a higher TER, and it seems to have done better than it's foreign brothers in the last few years (regarding it's percentual growth). How should I go about comparing them? The real (brazilian currency) has recently gone down heavily and it concerns me a lot. Is there a way to currency hedge? Should I?

REGARDING BONDS

Bonds here are also a different story. I still have to read more about the possibility of investing in bond funds here, but I mainly have one question: how much return should I expect from these types of investments?

Here we have Tesouro Direto and it offers some good returns with virtually no risk at all (they're backed by the federal government). There are products like Treasury Bonds which pay up to 8% per year and it's earnings are taxed at a minimum of 15% if you keep them for more than 2 years. Is this good enough? Should I expect more from bond funds when I can keep these until maturity? There are also corporate bonds (and funds of them) with higher yields that are exempt from taxes, but there's no backing at all for those. Is it worth taking risks with part of your bond allocation?



TO ANY FELLOW BRAZILIAN BOGLEHEAD

If you're also a brazilian Boglehead, what is your portfolio like?
funwithfunds
Posts: 9
Joined: Tue Oct 20, 2020 8:19 pm

Re: Questions from a brazilian investor

Post by funwithfunds »

Hey! I'm also a 20-something Brazilian who just started investing in international ETFs, so I faced many of the same questions you have.

While the general Boglehead's Guide philosophy applies to any investor, how to get there certainly varies from country to country. The wiki articles are really good starting points:

https://www.bogleheads.org/wiki/Getting ... _investors
https://www.bogleheads.org/wiki/Investing_from_Brazil
https://www.bogleheads.org/wiki/Nonresi ... ciled_ETFs
https://www.bogleheads.org/wiki/Non-US_ ... currencies

I also browse the /r/investimentos subreddit (not just Bogleheads there, so you'll see other strategies discussed) and watch Otávio Paranhos (Brazilian youtuber who invests only in ETFs).

Now on your questions:
Having no direct access to decent no load index mutual funds, are ETFs the best way to go?
Yes. BR mutual funds' rates are specially bad (2% annual rate and 20% performance rate) and end up eating a lot of your returns.
Do I make an initial investment in ETFs according to my asset allocation, increment it monthly and rebalance when necessary only to cash out upon retirement?
Yes. At the beginning you can usually rebalance back to your target allocation with your monthly contributions - just buy more shares of the currently underweighted ETF. As your portfolio grows you may have to sell the overweighted ETFs in order to rebalance - or just tolerate some temporary discrepancies in your portfolio.

Selling to rebalance is usually not recommended due to capital gains tax. However, us Brazilians can sell up to 35k BRL of foreign assests (so, US or Irish domiciled ETFs) monthly and not incur in any taxes.
If ETFs are index fund traded on exchanges and, in the long haul, markets go up, will the shares' value (and my ongoing position) skyrocket decades from now when I sell? Does the spread strongly affect me? Are there splits?
I haven't worried too much about that, but ETFs do try to keep their share prices accessible and will split occasionally. Spreads are not that big of a deal for popular ETFs and from what I've understood (again, I didn't really deeply research this topic) the ETFs liquidity depends on the liquidity of the its underlying assets (stocks), which is usually good.
Having read up on the wonders of foreign domiciled ETFs as a tax savvy way to go, how do I account for the currency risk involved in investing in foreign assets? For instance, here we have an ETF called IVVB11, which is essentially Blackrock's IVV (tracks S&P 500) offered in our stock exchange with a higher TER, and it seems to have done better than it's foreign brothers in the last few years (regarding it's percentual growth). How should I go about comparing them? The real (brazilian currency) has recently gone down heavily and it concerns me a lot. Is there a way to currency hedge? Should I?
The "Non-US investors and ETF currencies" wiki article I linked above does a great job of clearing up any questions about currency. Basically, your currency exposure depends not on which currency the ETF is listed on (so BRL for IVVB11, or USD/EUR for ETFs traded in the US/Europe), but on the underlying assets' location. In the case of IVVB11, you'll be exposed to USD, since it tracks the S&P 500. IVVB11's higher returns in BRL of you see are due to the BRL losing value against the USD, not the fund itself performing better than IVV. If you dollarize IVVB11's performance it'll mostly match IVV's.

Our way to currency hedge would be increasing the representation of the Brazilian market in our portfolios. This is called by many as adding a "home bias" to your portfolio and there are lengthy discussions about its pros and cons - this Ben Felix video explains some of them.

I personally add a slight currency hedge by increasing my emerging markets exposure (see last question).

Now on to the issue of whether to invest on IVVB11 or foreign domiciled ETFs, I chose the latter for two main reasons:

- more options (global funds like VT/VWRA, developed and emerging markets ETFs, etc.), so you're not exposed only to the S&P500;
- the monthly 35k BRL capital gains tax exemption I mentioned before.

Regarding the exemption: it does not apply to IVVB11 (and other ETFs listed in B3 such as BOVA11, SMAC11, etc.), so the capital gains from those funds are always taxed at 15%, so, at least tax-wise, it's better to invest in ETFs outside of Brazil.

The cons of investing in foreign ETFs are mostly related to exchanging BRL to USD or EUR: you'll pay a 0,38% IOF tax and about 1,4% fee to your exchange agent (I personally use Remessa Online). These costs definitely hurt haha but in the long run I think it's better than the 15% capital gains tax.
Bonds here are also a different story. I still have to read more about the possibility of investing in bond funds here, but I mainly have one question: how much return should I expect from these types of investments?

Here we have Tesouro Direto and it offers some good returns with virtually no risk at all (they're backed by the federal government). There are products like Treasury Bonds which pay up to 8% per year and it's earnings are taxed at a minimum of 15% if you keep them for more than 2 years. Is this good enough? Should I expect more from bond funds when I can keep these until maturity? There are also corporate bonds (and funds of them) with higher yields that are exempt from taxes, but there's no backing at all for those. Is it worth taking risks with part of your bond allocation?
Didn't really look that much into bonds, since I think a 100% equity allocation is ok for people who have a longe time (30+ years) before retirement.

However, my previous investments before discovering the Bogleheads were all in Tesouro Direto, so I have a lot of my portfolio there.

What must be clear is that the "virtually no risk at all (they're backed by the federal government)" is not accurate. The bonds as a risk-free investment mostly applies to US/developed countries' bonds, which are rated as AA+ or AAA by risk agencies. The Brazilian gov bonds, on the other hand, are rated as BB or BB-, which is definitely not risk free. You also are exposed to the BRL when buying Tesouro Direto, so if it loses value so will your bonds.

As an example of how risky emerging market bonds can be just check out our neighbours in Argentina.

Personally I'm just leaving my previously bought Tesouro Direto bonds, but from now on will invest only in ETFs. I also think the Tesouro SELIC can be a good option to "park" your money if you might need it in the short-medium term (not your emergency reserve though, this one should be left in your Poupança or a CDB with daily liquidity).
TO ANY FELLOW BRAZILIAN BOGLEHEAD

If you're also a brazilian Boglehead, what is your portfolio like?
It currently looks like this:

Image
(Renda Fixa BR are Corporate Bonds such as LC, LCA)

As I said, my previous investments were mostly in Tesouro Direto.

However, my ETF holdings - which more accurately represent my ideal allocation - are these:

Image

Both are accumulating Irish Domiciled ETFs* which I bought through TradeStation Global.
*Tax-wise those are the best funds for Brazilians, but this post is already really long so I won't delve into that, let me know if you have any questions about it.

Compared to a Global neutral portfolio (VWRA for instance is 89% developed/11% emergents) I overweight (22%) emerging markets - this is due to currency exposure, as I said before.

I also want to factor invest (Value, Small Caps, etc.) but am still studying how to do it, since there are not as many options in Irish ETFs - I might just have to invest in US ETFs for that.
brrio
Posts: 20
Joined: Mon Sep 07, 2020 8:23 pm
Location: Brazil

Re: Questions from a brazilian investor

Post by brrio »

I'm brazilian too. I've been using Passfolio. You can invest in a global two-ETF portfolio there with VT(equity) and BNDW(bonds).
tomsense76
Posts: 1428
Joined: Wed Oct 14, 2020 1:52 am

Re: Questions from a brazilian investor

Post by tomsense76 »

Are there good Brazilian bond funds one can use? AIUI the Boglehead portfolio holds bonds as a form of stability in the portfolio and as a way to cover future expenses as approaching retirement. So having bonds in one's home currency makes sense for that. Though admit to not knowing anything about Brazilian investment options.
"Anyone who claims to understand quantum theory is either lying or crazy" -- Richard Feynman
TedSwippet
Posts: 5181
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Questions from a brazilian investor

Post by TedSwippet »

brrio wrote: Tue Nov 10, 2020 6:14 pm I'm brazilian too. I've been using Passfolio. You can invest in a global two-ETF portfolio there with VT(equity) and BNDW(bonds).
You can, but you perhaps should not. Brazil has no tax treaties with the US, so Brazilian investors can get better results by using equivalent Ireland domiciled ETFs. More here:

Nonresident alien investors and Ireland domiciled ETFs - Bogleheads
brrio
Posts: 20
Joined: Mon Sep 07, 2020 8:23 pm
Location: Brazil

Re: Questions from a brazilian investor

Post by brrio »

TedSwippet wrote: Wed Nov 11, 2020 3:04 am Brazil has no tax treaties with the US
I think we have:

http://www.planalto.gov.br/ccivil_03/_A ... /D8506.htm

https://cabecadebogle.blogspot.com/2017 ... erior.html

We don't have to pay taxes on dividends in Brazil if we have already paid in US.

Ireland domiciled accumulation funds let you avoid even the dividend tax in US. The other advantage is to avoid the estate tax on portfolios greater than 60K USD.

I've chosen Passfolio because I'm starting to invest off-shore and the size of my investments abroad do not compensate the costs of having an Interactive Broker account (to have access to Ireland domiciled ETFs).

Passfolio charges me nothing to invest there.
brrio
Posts: 20
Joined: Mon Sep 07, 2020 8:23 pm
Location: Brazil

Re: Questions from a brazilian investor

Post by brrio »

tomsense76 wrote: Tue Nov 10, 2020 10:05 pm Are there good Brazilian bond funds one can use? AIUI the Boglehead portfolio holds bonds as a form of stability in the portfolio and as a way to cover future expenses as approaching retirement. So having bonds in one's home currency makes sense for that. Though admit to not knowing anything about Brazilian investment options.
At the current level of interest rate in Brazil I prefer to have tax-exempt credit bills (LCIs and LCAs).
TedSwippet
Posts: 5181
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Questions from a brazilian investor

Post by TedSwippet »

brrio wrote: Wed Nov 11, 2020 6:04 am
TedSwippet wrote: Wed Nov 11, 2020 3:04 am Brazil has no tax treaties with the US
I think we have:

http://www.planalto.gov.br/ccivil_03/_A ... /D8506.htm
No. This is a FATCA intergovernmental agreement, not an income tax treaty. FATCA intergovernmental agreements deal with inter-country income and asset reporting, not with tax rates:

https://home.treasury.gov/policy-issues ... liance-act

The lists of US income tax treaties and US estate tax treaties are here:

https://www.irs.gov/businesses/internat ... ies-a-to-z
https://www.irs.gov/businesses/small-bu ... ernational

Brazil is not on either list.
brrio wrote: Wed Nov 11, 2020 6:04 am https://cabecadebogle.blogspot.com/2017 ... erior.html

We don't have to pay taxes on dividends in Brazil if we have already paid in US.
This is a local tax credit for US tax paid. As long as your local rate is 30% or higher, this is no loss. Otherwise, you would be better off with non-US domiciled ETFs. From the document you linked, the highest Brazilian tax rate looks to be 27.5%, so most Brazilians, if not all, will not be able to fully claim the 30% paid to the US, making some or even all of it a deadweight tax loss.
brrio wrote: Wed Nov 11, 2020 6:04 am Ireland domiciled accumulation funds let you avoid even the dividend tax in US. The other advantage is to avoid the estate tax on portfolios greater than 60K USD.
Not entirely. An Ireland domiciled accumulation fund holding US stocks will still have to pay 15% internally to the US on dividends it receives from those stocks. An Ireland domiciled fund holding non-US stocks does however entirely avoid all US dividend tax, making these an even better vehicle for Brazilian investors than a US domiciled fund holding non-US stocks.

Right on the US estate tax.
brrio wrote: Wed Nov 11, 2020 6:04 am I've chosen Passfolio because I'm starting to invest off-shore and the size of my investments abroad do not compensate the costs of having an Interactive Broker account (to have access to Ireland domiciled ETFs). Passfolio charges me nothing to invest there.
For small portfolios, a cheap local broker offering US domiciled ETFs may well be better value than Interactive Brokers with their $10 monthly fee.

You really have to pay close attention to when you reach the crossover point though, when paying Interactive Brokers $10 each month is less than unrecoverable US tax drag. And once past $60k, the threat of US estate tax starts to dominate the decision. I am sure that many people stick with the local option long past the point at which their loss to US tax is higher than the cost of a proper international broker.
brrio
Posts: 20
Joined: Mon Sep 07, 2020 8:23 pm
Location: Brazil

Re: Questions from a brazilian investor

Post by brrio »

TedSwippet wrote: Wed Nov 11, 2020 6:24 am This is a local tax credit for US tax paid. As long as your local rate is 30% or higher, this is no loss. Otherwise, you would be better off with non-US domiciled ETFs. From the document you linked, the highest Brazilian tax rate looks to be 27.5%, so most Brazilians, if not all, will not be able to fully claim the 30% paid to the US, making some or even all of it a deadweight tax loss.
We don't pay taxes on dividends received from brazilian stocks negotiated here. But if the dividend is received from abroad it aggregates on the total of taxable income. The best option abroad would be instruments that accumulate the dividends like irish based ETFs.
TedSwippet wrote: Wed Nov 11, 2020 6:24 am For small portfolios, a cheap local broker offering US domiciled ETFs may well be better value than Interactive Brokers with their $10 monthly fee.
There's no such a thing here in Brazil. Our SEC (CVM) does not permit it. Passfolio is based in US (to be precise, it's a kind of gateway to DriveWealth) and is prohibited to advertise targeting to brazilian clients.

As my offshore portfolio is small (I am doing dollar cost averaging to build it) I receive very little dividends, so while it is small and there is no low cost option to invest in irish based ETFs, I will stick to Passfolio.
sk2101
Posts: 589
Joined: Sun Jun 02, 2013 4:54 pm

Re: Questions from a brazilian investor

Post by sk2101 »

I have a related question for my brazilian friends. I live in the US but I do have an account with Bradesco Prime in Brazil. This is way less than 1% of my total assets so I really don't pay much attention to it. I have no need for that cash and never touch it (except for ATM withdrawals when traveling in Brazil). Currently it has been sitting in CDBs and I know that is a bad choice at this time. I don't keep track of investing in Brazil so I really don't know where to go. Conversations with my relationship manager are fruitless as they always try to steer towards funds with high fees. Do you have any recommendations of investments I can do through Bradesco Prime to have some return on that cash?
brrio
Posts: 20
Joined: Mon Sep 07, 2020 8:23 pm
Location: Brazil

Re: Questions from a brazilian investor

Post by brrio »

sk2101 wrote: Wed Nov 11, 2020 8:08 am I have a related question for my brazilian friends. I live in the US but I do have an account with Bradesco Prime in Brazil. This is way less than 1% of my total assets so I really don't pay much attention to it. I have no need for that cash and never touch it (except for ATM withdrawals when traveling in Brazil). Currently it has been sitting in CDBs and I know that is a bad choice at this time. I don't keep track of investing in Brazil so I really don't know where to go. Conversations with my relationship manager are fruitless as they always try to steer towards funds with high fees. Do you have any recommendations of investments I can do through Bradesco Prime to have some return on that cash?
I am afraid no. You have a resident or non-resident account?

Brazil is a hostile country to non-resident investors:
https://tersi.adv.br/conta-nao-resident ... o-dificil/
TedSwippet
Posts: 5181
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Questions from a brazilian investor

Post by TedSwippet »

brrio wrote: Wed Nov 11, 2020 7:53 am As my offshore portfolio is small (I am doing dollar cost averaging to build it) I receive very little dividends, so while it is small and there is no low cost option to invest in irish based ETFs, I will stick to Passfolio.
Of course. As long as this works for you, you should continue on with it.

Just stay alert to the idea that once your excess US tax drag is higher than broker costs would be at Interactive Brokers or similar, and particularly once your US assets exceed the miserly $60k exemption for US estate tax, it is then time to move to Ireland domiciled or other non-US domiciled ETFs.
brrio
Posts: 20
Joined: Mon Sep 07, 2020 8:23 pm
Location: Brazil

Re: Questions from a brazilian investor

Post by brrio »

If your assets on Iteractive Brokers are greater than $100k the Account Maintenance Fee is not charged.

https://www.interactivebrokers.com/en/index.php?f=4969
funwithfunds
Posts: 9
Joined: Tue Oct 20, 2020 8:19 pm

Re: Questions from a brazilian investor

Post by funwithfunds »

I didn't touch US domiciled ETFs vs Irish domiciled ETFs on my previous posts, but the Accumulating (Acc) versions of the latter are more tax efficient for Brazilian investors.

This topic is really well explained in this wiki article, but I'll try to summarize.

First of all, Brazil taxes dividends received from foreign assets at a 27,5%, but you can claim dividend withholding tax (DWT) paid to another country as a tax credit.

Dividends from US domiciled ETFs are subject to the following DWT:
  • 30% on US stocks
  • 30% + local DWT on international stocks
As the 30% DWT rate is higher than the 27,5% BR rate on foreign dividends, you don't have to pay the 27,5% tax.

Yet there are no Acc US ETFs, which means you can't avoid the DWT and are also subject to trade costs (e. g. broker fees) when reinvesting the dividends.

Irish domiciled ETFs, on the other hand, are subject to the following DWT:
  • 15% on US stocks
  • local DWT on international stocks
The rates are clearly lower than US ETFs, which makes them a better option.

However, if the Irish ETFs distributes dividends a Brazilian investor will have to pay the 27,5% tax on foreign dividends to the Receita Federal (Brazilian IRS). Of course one could claim the DWT paid locally (15% on US stocks, varies for international stocks), but there would still be a difference to be paid until one reached the full 27,5%.

This means Distributing Irish ETFs are a bad idea for Brazilian investors.

Acc ETFs, on the other hand, don't distribute dividends (instead reinvesting them internally) and therefore are a perfect match for Brazilian investors.

Acc ETFs can be a problem for tax residents of countries that tax notional dividends (dividends that would've been paid by an Acc ETF if it distributed the dividends instead of reinvesting them), but Brazil has no such tax.

brrio wrote: Wed Nov 11, 2020 12:30 pm If your assets on Iteractive Brokers are greater than $100k the Account Maintenance Fee is not charged.

https://www.interactivebrokers.com/en/index.php?f=4969
The IBKR &10 monthly maintenance fee is surely the biggest issue for Brazilians who want to invest in Irish ETFs.

However, I found another broker - Tradestation Global, an IBKR partner - which doesn't charge that fee, in spite of using IBKR's system/backend. They instead charge slightly higher transaction fees than IBKR, but nothing substantial for a buy & hold ETF investment strategy - day traders on the other hand would hate it :) .

I opened my account with TSG a couple weeks ago and everything went smoothly: about two to three days after registering I was able to buy my first Irish ETFs shares. It's definitely a great alternative for Brazilian investors and I've been meaning to write a post (in Portuguese) in the /r/investimentos subreddit about it.
tomsense76 wrote: Tue Nov 10, 2020 10:05 pm Are there good Brazilian bond funds one can use? AIUI the Boglehead portfolio holds bonds as a form of stability in the portfolio and as a way to cover future expenses as approaching retirement. So having bonds in one's home currency makes sense for that. Though admit to not knowing anything about Brazilian investment options.
I didn't research much about it because I'm currently not that interested in bonds, but I know of two Brazilian bonds (Tesouro Direto) ETFs trade in B3 (Brazilian stock exchange):

FIXA11: TER 0,30%, first bonds ETF launched here afaik
IMAB11: TER 0,25%, launched last year, official Tesouro Direto partner

Edit: after some research I've found out there are other ETFs that follow the IMA indexes (Índice de Mercado Anbima, which follows Brazilian treasury bond, here's an article about them in Portuguese) from other financial institutions.
Edit2: you can find all bonds ETFs listed on B3 here.
TedSwippet
Posts: 5181
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Questions from a brazilian investor

Post by TedSwippet »

funwithfunds wrote: Wed Nov 11, 2020 5:00 pmI opened my account with TSG a couple weeks ago and everything went smoothly: about two to three days after registering I was able to buy my first Irish ETFs shares. It's definitely a great alternative for Brazilian investors and I've been meaning to write a post (in Portuguese) in the /r/investimentos subreddit about it.
Also worth adding this information to our wiki?

Investing from Brazil - Bogleheads

You can become a wiki author if you wish. Alternatively, if you can say what to add and where best to put it, I can add it for you.
funwithfunds
Posts: 9
Joined: Tue Oct 20, 2020 8:19 pm

Re: Questions from a brazilian investor

Post by funwithfunds »

To all Brazilians, I've just posted a thread on Reddit (in Portuguese) regarding my experience with TradeStation Global:

https://www.reddit.com/r/investimentos/ ... on_global/

TedSwippet wrote: Thu Nov 12, 2020 3:22 am
funwithfunds wrote: Wed Nov 11, 2020 5:00 pmI opened my account with TSG a couple weeks ago and everything went smoothly: about two to three days after registering I was able to buy my first Irish ETFs shares. It's definitely a great alternative for Brazilian investors and I've been meaning to write a post (in Portuguese) in the /r/investimentos subreddit about it.
Also worth adding this information to our wiki?

Investing from Brazil - Bogleheads

You can become a wiki author if you wish. Alternatively, if you can say what to add and where best to put it, I can add it for you.
I'll definitely look into it this weekend.
TedSwippet
Posts: 5181
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Questions from a brazilian investor

Post by TedSwippet »

funwithfunds wrote: Thu Nov 12, 2020 10:14 pm To all Brazilians, I've just posted a thread on Reddit (in Portuguese) regarding my experience with TradeStation Global:

https://www.reddit.com/r/investimentos/ ... on_global/

TedSwippet wrote: Thu Nov 12, 2020 3:22 am
funwithfunds wrote: Wed Nov 11, 2020 5:00 pmI opened my account with TSG a couple weeks ago and everything went smoothly: about two to three days after registering I was able to buy my first Irish ETFs shares. It's definitely a great alternative for Brazilian investors and I've been meaning to write a post (in Portuguese) in the /r/investimentos subreddit about it.
Also worth adding this information to our wiki?

Investing from Brazil - Bogleheads

You can become a wiki author if you wish. Alternatively, if you can say what to add and where best to put it, I can add it for you.
I'll definitely look into it this weekend.
Thanks. Your Reddit thread looks very complete, so rather than duplicate it in the wiki, best is perhaps to summarise things in just a sentence or two, and then add links from the wiki to this post and your Reddit thread.

Also, thanks for coming back to the forum with this information. Direct first-hand experience is always useful to add to our knowledge base.
sk2101
Posts: 589
Joined: Sun Jun 02, 2013 4:54 pm

Re: Questions from a brazilian investor

Post by sk2101 »

brrio wrote: Wed Nov 11, 2020 9:23 am I am afraid no. You have a resident or non-resident account?

Brazil is a hostile country to non-resident investors:
https://tersi.adv.br/conta-nao-resident ... o-dificil/
Thanks for your help! I also have a brazilian citizenship and file annual tax returns as required per advice of my local accountant. So I believe I would be considered a resident for local tax purposes. However I am not looking to open new accounts with other instituions, as I think that would be a big hassle to go through. I only would like to know what are the best options within Bradesco's umbrella.
brrio
Posts: 20
Joined: Mon Sep 07, 2020 8:23 pm
Location: Brazil

Re: Questions from a brazilian investor

Post by brrio »

sk2101 wrote: Fri Nov 13, 2020 8:59 am
brrio wrote: Wed Nov 11, 2020 9:23 am I am afraid no. You have a resident or non-resident account?

Brazil is a hostile country to non-resident investors:
https://tersi.adv.br/conta-nao-resident ... o-dificil/
Thanks for your help! I also have a brazilian citizenship and file annual tax returns as required per advice of my local accountant. So I believe I would be considered a resident for local tax purposes. However I am not looking to open new accounts with other instituions, as I think that would be a big hassle to go through. I only would like to know what are the best options within Bradesco's umbrella.
For other investments a Bradesco's client has to use their broker "Ágora".

They charge 18 reais for each order:
https://www.hardmob.com.br/threads/3117 ... ras/page77
cmweber
Posts: 3
Joined: Sat Nov 14, 2020 8:58 am

Re: Questions from a brazilian investor

Post by cmweber »

Hi,

I'm somewhat of a boglehead myself. Even though I started a 3 fund portfolio just this year, I had been wanting to start a boglehead portfolio for at least two years. I'm in my mid-thirties and I invest in Brazilian stocks consistently for 7 years and about 3 years ago started funding an US portfolio.

I still have a separate US portfolio (from my drivewealth account that turned into an Avenue.us account. I'm leaving it there for now because they charge U$100 just to move it somewhere else!) with a few stocks and ETFs that I picked, but I'm not putting new money into it lately.

I have an IBKR account. I use it to invest in US ETFs, but here is the thing. I sell bull put spreads on SPY using IBKR's Trader work Station. With two contracts far OTM with a 0.20 delta I can pay for all the IBKR fees for a year and still have some change left (of course, there are taxes to pay in Brazil if the trade turns a profit). Since they have defined risk and a high probability of success I've been sitting on their net proceeds that I'm considering cash (they're in VGSH for now until I figure what to with them. I'll reverse some of it to leverage the portfolio.) I'm not increasing the size of the spreads or their numbers to keep risk to a minimum, but that ammount of cash will keep growing slowly. Once a month, I set the spreads and let them go their ways, because I have to work and don't wanna be actively checking them all day, every day.

Anyway, for that, the U$10 are worth it!

But I understand if that isn't your thing. I'm aware most people here woulnd't like that at all.

Hey, it would be nice to know other brazilians investing abroad. And it's super wierd writing in english to someone who speaks portuguese. Where do you guys talk about investiments with other brazilians? I've had my time on bastter.com and don't wanna go back! Too stressful!
brrio
Posts: 20
Joined: Mon Sep 07, 2020 8:23 pm
Location: Brazil

Re: Questions from a brazilian investor

Post by brrio »

cmweber wrote: Sat Nov 14, 2020 9:33 am Where do you guys talk about investiments with other brazilians?
There's this forum in portuguese about investments in general:
https://www.hardmob.com.br/forums/338-Dinheiro-Negocios

For global investments in ETFs, factor investing, focus on retirement:
Otávio Paranhos in Youtube and Instagram

For Options Trading using TastyWorks plattaform look for this channels on YouTube:
Doc Trader
Duo Market

This "influencers" used to offer courses with access to their communities as a bonus.
cmweber
Posts: 3
Joined: Sat Nov 14, 2020 8:58 am

Re: Questions from a brazilian investor

Post by cmweber »

brrio wrote: Mon Nov 16, 2020 9:22 am
cmweber wrote: Sat Nov 14, 2020 9:33 am Where do you guys talk about investiments with other brazilians?
There's this forum in portuguese about investments in general:
https://www.hardmob.com.br/forums/338-Dinheiro-Negocios

For global investments in ETFs, factor investing, focus on retirement:
Otávio Paranhos in Youtube and Instagram

For Options Trading using TastyWorks plattaform look for this channels on YouTube:
Doc Trader
Duo Market

This "influencers" used to offer courses with access to their communities as a bonus.
I'll check the forum. I've seen Paranhos. Just a few videos. I tend to watch english speaking "influencers".
On the options side, for now I'll focus only on bull put spreads for the sake of simplicity.
Thanks!
funwithfunds
Posts: 9
Joined: Tue Oct 20, 2020 8:19 pm

Re: Questions from a brazilian investor

Post by funwithfunds »

TedSwippet wrote: Fri Nov 13, 2020 2:57 am
funwithfunds wrote: Thu Nov 12, 2020 10:14 pm To all Brazilians, I've just posted a thread on Reddit (in Portuguese) regarding my experience with TradeStation Global:

https://www.reddit.com/r/investimentos/ ... on_global/

TedSwippet wrote: Thu Nov 12, 2020 3:22 am
funwithfunds wrote: Wed Nov 11, 2020 5:00 pmI opened my account with TSG a couple weeks ago and everything went smoothly: about two to three days after registering I was able to buy my first Irish ETFs shares. It's definitely a great alternative for Brazilian investors and I've been meaning to write a post (in Portuguese) in the /r/investimentos subreddit about it.
Also worth adding this information to our wiki?

Investing from Brazil - Bogleheads

You can become a wiki author if you wish. Alternatively, if you can say what to add and where best to put it, I can add it for you.
I'll definitely look into it this weekend.
Thanks. Your Reddit thread looks very complete, so rather than duplicate it in the wiki, best is perhaps to summarise things in just a sentence or two, and then add links from the wiki to this post and your Reddit thread.

Also, thanks for coming back to the forum with this information. Direct first-hand experience is always useful to add to our knowledge base.
How does one become a wiki author? I was going to just send you a quick paragraph, but I think I could add some info to other parts of the article (a comment on Irish ETFs and just include a few other US Brokers that Brazilian investors use).

cmweber wrote: Sat Nov 14, 2020 9:33 am Hi,

I'm somewhat of a boglehead myself. Even though I started a 3 fund portfolio just this year, I had been wanting to start a boglehead portfolio for at least two years. I'm in my mid-thirties and I invest in Brazilian stocks consistently for 7 years and about 3 years ago started funding an US portfolio.

I still have a separate US portfolio (from my drivewealth account that turned into an Avenue.us account. I'm leaving it there for now because they charge U$100 just to move it somewhere else!) with a few stocks and ETFs that I picked, but I'm not putting new money into it lately.

I have an IBKR account. I use it to invest in US ETFs, but here is the thing. I sell bull put spreads on SPY using IBKR's Trader work Station. With two contracts far OTM with a 0.20 delta I can pay for all the IBKR fees for a year and still have some change left (of course, there are taxes to pay in Brazil if the trade turns a profit). Since they have defined risk and a high probability of success I've been sitting on their net proceeds that I'm considering cash (they're in VGSH for now until I figure what to with them. I'll reverse some of it to leverage the portfolio.) I'm not increasing the size of the spreads or their numbers to keep risk to a minimum, but that ammount of cash will keep growing slowly. Once a month, I set the spreads and let them go their ways, because I have to work and don't wanna be actively checking them all day, every day.

Anyway, for that, the U$10 are worth it!

But I understand if that isn't your thing. I'm aware most people here woulnd't like that at all.

Hey, it would be nice to know other brazilians investing abroad. And it's super wierd writing in english to someone who speaks portuguese. Where do you guys talk about investiments with other brazilians? I've had my time on bastter.com and don't wanna go back! Too stressful!
If I ever start playing with options (might do it with a "casino account", at most 5% of my portfolio) I might switch to IBKR. You would probably enjoy the thetagang subreddit... but be careful when picking up pennies in front of a steamroller :D

About other forums, I mainly frequent the investimentos subreddit, however reddit is not the best medium for long discussions, since threads leave the front page and can't be bumped back.
TedSwippet
Posts: 5181
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Questions from a brazilian investor

Post by TedSwippet »

funwithfunds wrote: Tue Nov 17, 2020 5:36 pm How does one become a wiki author? I was going to just send you a quick paragraph, but I think I could add some info to other parts of the article (a comment on Irish ETFs and just include a few other US Brokers that Brazilian investors use).
Details are here: Help:Getting started - Bogleheads
cmweber
Posts: 3
Joined: Sat Nov 14, 2020 8:58 am

Re: Questions from a brazilian investor

Post by cmweber »

funwithfunds wrote: Tue Nov 17, 2020 5:36 pm If I ever start playing with options (might do it with a "casino account", at most 5% of my portfolio) I might switch to IBKR. You would probably enjoy the thetagang subreddit... but be careful when picking up pennies in front of a steamroller
I don't see options like a casino at all. At least not bull put spreads.

They're literally insurance and reinsurance.

I sell a put option and buy another at a lower strike. I also set automatic stop losses on the IBKR platform if the underlying hits my breakeven point. I never incur the full loss but in exchange I forego the chance of the trading turning around in my favor again.

I always sell two months before expiration date and let it decay. Since selling options isn't my portfolio "core business" I don't mind if the profits are small. And since I'm gonna pay U$10 no matter what, the options trading fees don't hurt... just a little more cash coming in :moneybag

Now... when people start talking about strangles and whatnot... Even Iron Condors... Then I agree with you about it being like gambling. Perhaps the wheel strategy could have a place in my portfolio, but that requires more money than I'd like.
foxcom
Posts: 1
Joined: Wed Feb 03, 2021 12:13 pm

Re: Questions from a brazilian investor

Post by foxcom »

funwithfunds wrote: Wed Nov 11, 2020 5:00 pm
The IBKR &10 monthly maintenance fee is surely the biggest issue for Brazilians who want to invest in Irish ETFs.

However, I found another broker - Tradestation Global, an IBKR partner - which doesn't charge that fee, in spite of using IBKR's system/backend. They instead charge slightly higher transaction fees than IBKR, but nothing substantial for a buy & hold ETF investment strategy - day traders on the other hand would hate it :) .

I opened my account with TSG a couple weeks ago and everything went smoothly: about two to three days after registering I was able to buy my first Irish ETFs shares. It's definitely a great alternative for Brazilian investors and I've been meaning to write a post (in Portuguese) in the /r/investimentos subreddit about it.
How much is the transaction fee to buy Irish ETFs? IB charges are 5.00, so 2 purchases per month and the maintenance fees are gone.
brrio
Posts: 20
Joined: Mon Sep 07, 2020 8:23 pm
Location: Brazil

Re: Questions from a brazilian investor

Post by brrio »

Updating the topic, IB commission is $2 to buy an irish domiciled fund on LSE(tiered). There is no more maintenance fee.
Post Reply