As you may know, as of October 2020, the rules for investing in BDRs have changed. Previously, BDRs were only accessible by qualified investors, who had more than R$1 million invested, but now they can be acquired by almost anyone. Brazilian Depositary Receipts (BDRs) are certificates for securities issued by publicly-held companies, or similar companies, based abroad, and generally issued by a depository institution in Brazil.
Given this dramatic change, you must be asking yourself: should I purchase BDRs or invest in US stocks directly? What are the differences between buying BDRs or investing in stocks via a US broker-dealer?
In this post, we’ll go over some of the key advantages of investing in the United States with Passfolio:
Through Passfolio Securities, you can buy as little as $1 of any stock, because we allow fractional share investing (please see more info here). With BDRs, on the other hand, you generally have to use the standard share amount of 10 and, in some cases, the minimum investment required may be high.
Currently, only about 500 BDRs are available. Through Passfolio Securities, you have access to more than 3,800 stocks, ETFs and REITs from the American market. How about that?
Generally, the price of a BDR is higher than the price of a company’s stock in the American market in US dollars. The higher spread of BDRs exists because of the fees charged by the banks that issue the BDRs. Moreover, the American market has relatively higher liquidity, so it’s easier for investors to buy or sell their assets at a desired price.
A lot of BDRs charge up to 5% of the amount received in dividends. At Passfolio Securities, you have access to dividend-paying stocks where no fee is charged by Passfolio on the dividends received. Keep in mind that not all stocks pay dividends and that other charges may apply.
With Passfolio Securities, you can start investing in US stock with as little as $1 - all with no commission fees¹². We make investing in US stocks accessible and even accept local deposit methods such as TEDs.
Investing involves risk, including the risk of loss.
¹ Please see our fractional shares disclosure.
² Securities less than $5 cost $0.02/share. Please see our disclosures on other charges.
Please read important legal disclosures that apply to your relationship with Passfolio.
Passfolio is a San Francisco fintech company democratizing investment opportunities by creating a unified, global, and borderless investment market starting with the United States Stock Market.