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Should you consider investing in BDRs or directly in US stocks, through an American broker-dealer? What is the difference?
In October 2020, the rules for investments 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 any person in the market.
Now, you may be asking yourself: should I invest in BDRs or directly in stocks from abroad, through an American broker? What is the difference?
For the second alternative, Passfolio might be an option for you. Passfolio is a US broker-dealer that gives you access to the United States stock market with an easy and fast platform. With the Passfolio app, you can deposit via TED and invest in more than 3,800 stocks, ETFs and REITs from the American market, with no commission fees and starting with just $100.*
* Securities less than $5 cost $0.02/share. Please see our disclosures on other charges.
There are some differences between investments in BDRs and US stocks:
Fractional market: through Passfolio, 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 have to use the standard share amount of 10 and, in some cases, the minimum investment required can be high.
Asset variety: currently, only around 500 BDRs are available. Through Passfolio, you have access to more than 3,800 stocks, ETFs and REITs from the American market.
Spread and liquidity: generally, the price of a BDR is higher than its price in the American market, when converted into dollars. This spread exists because of the amount charged by the banks that issue the BDR. Besides that, the American market generally has higher liquidity, so it’s more likely that the investor can buy or sell their assets for the desired price more quickly.
Dividends: a lot of BDRs charge up to 5% of the amount received in dividends. At Passfolio, 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.
Holidays: with BDRs, you have to follow holidays that don’t happen in the United States, so you may not be able to trade when the US stock market is opened.
Click here to sign up for Passfolio today and create your account by sending us some basic information about you. It only takes 5 minutes!
After signing up, download the Passfolio app on the App Store or Google Play. All your investments can be managed from the palm of your hand.
You can deposit just $100 to start. We accept deposits via wire transfers, TED, Remessa Online and other methods.
With Passfolio, you can convert your local currency to dollars and trade 3,800+ US stocks, ETFs and REITs, all with no commission fees*.
* Securities less than $5 cost $0.02/share. Please see our disclosures on other charges.
Click here to sign up for Passfolio today and create your account by sending us some basic information about you. It only takes 5 minutes!
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After signing up, download the Passfolio app on the App Store or Google Play. All your investments can be managed from the palm of your hand.
You can deposit just $100 to start. We accept deposits via wire transfers, TED, RemessaOnline and other methods.
With Passfolio, you can convert your local currency to dollars and trade 3,000+ US stocks, ETFs and REITs, all with no commission fees*.
* Securities less than $5 cost $0.02/share. Please see our disclosures on other charges.
Is Passfolio secure? Is Passfolio worth it? Check out what our users are saying about us!*
Securities less than $5 cost $0.02/share. Please see our disclosures on other charges.
Please see the terms of our referral program.
Please see our fractional shares disclosure.
Please read important legal disclosures that apply to your relationship with Passfolio.
Securities and cryptocurrencies are very different types of assets.
Cryptocurrencies are not securities.
Purchasing cryptocurrencies comes with a number of risks. Please read Passfolio Financial Cryptocurrency Risk Disclosure.
Currency and cryptocurrency exchange services provided by Passfolio Financial LLC (“Passfolio Crypto”), a US Money Services Business registered with FinCEN. Passfolio Financial LLC is not a broker dealer. Cryptocurrencies are not protected by either FDIC or SIPC.
Securities products and services offered to self-directed investors through Passfolio Securities LLC Member FINRA / SIPC. Passfolio Securities, LLC does not provide cryptocurrency-related services. Passfolio Securities LLC is a member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org.
Passfolio is the brand name of Panchain, Inc. Passfolio Securities LLC and Passfolio Financial LLC are fully-owned subsidiaries of Panchain, Inc.
To purchase securities using cryptocurrencies, you must first convert it into U.S. Dollars using Passfolio Financial LLC. You must then move the U.S. Dollar proceeds to your brokerage account at Passfolio Securities LLC where you can use it to buy securities.
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Be sure to consider your own financial situation, perform thorough research, and consult with a qualified tax professional before making any investment decisions concerning REITs. Investments in REITs and other real estate securities are subject to the same risks as direct investments in real estate. The real estate industry is particularly sensitive to economic downturns.
Where an investment is denominated in a currency other than the investor’s currency, changes in rates of exchange may have an adverse effect on the value, price of, or income derived from the investment.
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Passfolio Securities, LLC
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V.07 02/17/2020