In the event that the investor plans a specific expense or a series of these in the short term, we suggest subscribing said surplus in our Savings Balance Fund. This option is ideal for those who plan a similar investment for a fixed term. The fund in question yields the equivalent of a BADLAR rate (reference rate for bank time deposits) but with the advantage of being able to redeem, either totally or partially, the balance without being subject to a certain expiration date.
On the other hand, for those who are planning an expense in the medium term and want to take some coverage taking into account the recent inflation data of 6% for the month of April and what is expected for the coming months, we recommend doing so through of our Balance Inflation Linked Fund. It invests 58% in Treasury bills that adjust for short duration CER and 30% Sovereign CER Bonds. Through this strategy, the investor will be able to obtain returns similar to or higher than the rate of inflation.
The minimum investment for both mutual fund strategies is only 1,000 pesos.
Now, for those who are looking to allocate this extra salary to hard currency and avoid devaluation risk, they can do so by accessing the financial dollar or directly positioning themselves in Argentine corporate bonds in dollars. The most attractive thing about these instruments is that one can acquire them both in pesos and in dollars and the future flow is charged in dollars. In other words, both the payment of interest and the return of principal are charged in the US currency. This makes them a great tool for dollarization for those who have available pesos and for safeguarding capital in hard currency by offering an accurate flow backed by well-rated credits.
Today we see a universe of opportunities in the short and middle part of the corporate bond curve. We highlight in the first place, the bond of Pan American Energy 2027 Y Arcor 2023 for those more conservative profiles with yields around 4.5%. Then, for moderate profiles, we suggest taking a position on credits like Pampas 2023 with yields close to 6%. Lastly, for those who are less risk averse, we recommend the IRSA 2023 either YPF 2024 with yields of 9% and 11% respectively.
In general, the corporate bond alternatives mentioned have minimum investment sheets of 1,000 nominal. Which is equivalent to approximately 1,000 dollars or 200,000 pesos.
Another investment strategy to use the Christmas bonus in this context would be to invest in CEDEARS. They are variable income instruments that represent shares of companies listed abroad. The most interesting thing is the coverage provided by these instruments by following the fluctuations in the price of the dollar with liquidation. It is an ideal and super accessible alternative for those clients who wish to position themselves in stocks avoiding local risk in a wide universe of alternatives that has gained an incredible trading volume in recent times.
At Balanz, we are very active in recommending these instruments. In fact, we have made available to our investors our “CEDEARS Packs” which are basically strategies designed by our specialists based on sectors where we find value. They are available both in our apps as in our Web platform. Today we have already launched 17 different strategies.
Currently, given the context of high uncertainty and volatility with inflation reaching record levels and the start of the rate hike cycle by the Fed as a counterpart, we highlight the Pack of Companies that Distribute Dividends. An increase in the rise in rates, as well as an inflationary scenario, is favorable for value companies. Companies that pay dividends are usually stable and mature, with sustained growth. This generates greater predictability and less volatility in difficult times for the market. Within this strategy we find companies such as Coca-Cola, Exxon, Procter & Gamble and Altria.
Another pack that we consider interesting given the moment is our pack of Equity ETFs. It is composed almost 70% by DIA (Dow Jones) and SPY (S&P 500). Both replicate two of the largest stock market indices in the American market. Given the strong correction we are seeing, it may be a good entry alternative for certain profiles.
In conclusion, the collection of the Christmas bonus always generates concern and queries on the part of our clients. There are several alternatives in the market held by investors to be able to allocate that surplus intelligently. Our main objective, as specialists in value, is to order the product offer based on the client’s needs, always considering their profile and their investment horizon.
By Nicolás Lo Valvo, Analyst of Investment Ideas Balanz
Source: Ambito
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