Abstract

Global portfolio allocations are becoming ever important as new markets emerge and investors seek greater diversification and mitigation of risk. Much work has been done to explain the topic of global portfolio investment with regards to its advantages, disadvantages and potential diversification benefits. However, insufficient research has been done to aggregate the information and apply its findings to a specific market. The purpose of this study is to examine global portfolio investment as a means for not only risk mitigation and diversification but also for the increased percentage gains that can be achieved in the world. The paper encompasses the literature written on the subject and applies its findings to the Brazilian equity market. The results reveal that through Brazilian equities, investors are able to mitigate risk from their domestic market, expand their asset allocation and invest in a growing market that will reap great rewards in the future. This paper concludes with a brief discussion of the Brazilian equity market and its key industry components, and how these strategies can be implemented in Brazil’s equity market to take advantage of the growth and development its economy is encountering.