Brazilian investor home bias and global market exposure

Brazilian investors continue to demonstrate a significant ‘home bias,’ favoring domestic assets despite increasing exposure to global economic fluctuations. While studies indicate that between 16% and 18% of Brazilian consumption is subject to exchange rate variations, international investments declared in income tax accounted for only 2.2% of total wealth in 2024.

This preference for local markets is largely attributed to historically high domestic interest rates, such as the CDI, which has averaged a compound annual rate of 10.25% over the last two decades. Although the use of global accounts for foreign currency and international payments is rising—with 45.8% of Brazilians utilizing them—investors face challenges including concerns over institutional reliability and difficulty understanding market rules.

Recent developments show financial institutions expanding digital and international payment solutions to address these needs. For instance, BTG Pactual has introduced specialized packages for Brazilian students studying abroad, featuring US-based dollar accounts and investment options that do not require local credit history.

Despite the growth of digital wallets and contactless mobile payments, consumer friction remains. A survey by Melhores Cartões indicates that while nearly half of Brazilians use global accounts, 60% still face difficulties choosing a provider. Primary concerns include institutional reliability (47.2%) and understanding complex terms and conditions (37.8%). Experts continue to suggest that moving toward digital dollar accounts can help travelers avoid high exchange rates and security risks associated with physical cash.