A Clever Backdoor into Brazil
Fortunately, there is a much more civilised way to approach this. Instead of parachuting directly into the São Paulo stock exchange, sophisticated investors are increasingly using a side door. They look for global companies, listed on stable exchanges like the NYSE, that have significant operations in Brazil. This strategy gives you a slice of the Brazilian pie, but with the reassuring safety features of a US or European regulatory framework.
Take Vale, for instance. It’s one of the world’s biggest iron ore producers, and its fortunes are deeply entwined with Brazil’s vast mineral resources. When China goes on a building spree, Vale benefits. Yet, by holding its shares on the NYSE, you are insulated from the worst of the real’s mood swings. The same logic applies to the state-controlled oil giant Petrobras or the fintech disruptor Nu Holdings. You get the exposure to the growth story, without the full, unfiltered dose of local market risk.