Investment options according to the time horizon:
1) Pre-election period: assets with a maximum term of 3 months and whose maturities are prior to the STEP. In this sense, Treasury Bills in pesos (LEDES and LECER) show more interesting yields than a fixed term. For example, the LEDE vto. 04/28/2023 offers a yield of approximately 84% (9% higher than the regulated fixed term rate of 75%).
Another choice is the Balanz Money Market Common Investment Fund (FCI), which has extended hours to place money until 6:00 p.m. Its return for the last month was 5.7% (68% annualized) and, unlike the fixed term, it does not have a minimum term.
A separate paragraph for investors with a greater appetite for risk, who seek to capture a possible rally in Argentine stocks. For this profile, we have the new Performance X Fund made up entirely of shares that is managed by a team of professionals who will actively define the strategy, without following the Merval benchmark index. This FCI had a return of 25% so far this year.
2) Election period: It is possibly the period of greatest “noise” and that is why we would prefer a more defensive position and have assets tied to the evolution of inflation, the exchange rate or both in the portfolio.
An example is the FCI Performance III, made up entirely of corporate bonds from Argentine companies with high credit ratings. Its composition includes bonds that adjust for inflation, exchange rate and fixed rate.
Negotiable obligations in dollars are also highlighted, which can be purchased with pesos or hard currency through the stock market and that, regardless of the purchase currency; on each payment date the investor will receive dollars.
3) Possible transition: the strategy would not change too much to the previous point.
4) New mandate: the current government or another party. The strategy would imply more risk because it is a gamble and we would select post-election maturing securities that will depend on the expected courses of action for the next term.
For example, the bond dollar link maturity. 04/30/2024 (TV24) or the dual bond expiration. 02/28/2024 (TDF24) are suitable alternatives for those who expect a relaxation of the exchange rate and acceleration of the official exchange rate. Both bonds are below their par value and yield devaluation of the official exchange rate +14% TNA and +9% TNA respectively.
In conclusion, the term of the investment will determine the strategy and, as the months go by, information will be added (build lists, surveys, level of reserves, level of financing in pesos obtained by the government and macroeconomic data) that will weigh on investor expectations.
Product Analyst at Wealth Management at Balanz Capital
Source: Ambito
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