Cedears ETF: what this dollarized investment is about, what it diversifies and which are the preferred ones

There is a very tempting investment option on the Buenos Aires stock market: the Cedears ETF. These instruments are assets that are mostly traded in pesos but that are tied to the dollar with liquidation and, in the case of ETFs, these replicate from stock market indices to sectors of the economy and raw materials. What do we gain with them? dollarize investment, but, above all, diversification. That is why we will briefly explain what they are and, in addition, we will provide the guidelines to see which ones have the greatest potential to rise.

Santiago Ruiz Guiñazú, member of the Banza strategy team, in dialogue with Ámbitoagreed that “the ETF Cedears are a very good opportunity for Argentine investors because through these instruments they can diversify risks with a not very large minimum initial capitalIn addition, in pre-electoral contexts, uncertainty and volatility may increase and these assets are tied to the dollar.

It should be noted that ETFs allow exposure to a wide range of liquid assets, such as indices, commodities, sectors of the economy or emerging marketsand also allows diversify risk: It is recommended for those who have less knowledge of the market because it avoids having to choose each company in which to invest individually.

“Since the beginning of the Russia-Ukraine war we have been pondering the sector of raw Materialsand specifically the industry of energy. In this sense, the EFT XLEwhich replicates the behavior of the most representative companies in the energy sector, we believe that will continue to benefit in the medium term“, assured Santiago Ruiz Guiñazú and added:” On the other hand, we have a vision very optimistic about Brazil and your assets. In that sense, the EWZ ETFwhich is made up of a package of the most representative shares of that country, we believe that it has bullish potential.”

“Another ETF that we find interesting is the SPDR S&P 500. This instrument is the one with the largest volume to date in Argentina, and consists of a portfolio that represents the 500 stocks that make up the benchmark S&P 500 index. It predominantly contains US companies from high market value and pays dividends quarterly. This last is something very important for the investor who wants to add a periodic income to his investment in variable income”, closed Ruiz Guiñazú.

For his part, Nahuel Guevara, Portfolio Management Analyst at Inviualso in dialogue with this medium, offered three tempting options beyond the SPDR S&P 500, which he considered an inescapable reference in the industry. For Guevara the Ishares MSCI Brazil (EWZ) it’s also a winning bet as it has “exposure to large Brazilian companies that can capitalize on an orderly macroeconomy where rates will start to drop soon.”

On the other, he chose the SPDR Dow Jones Industrial Average (DIA) which is made up of thirty top-level US stocks, and is, according to Guevara, “an interesting alternative for avoid the strong concentration in tech mega-companies within the aforementioned S&P 500 and the risks that this implies”. Finally, he said, “for those who expect the US economy to maintain its resilience, iShares Russell 2000 (IWM) focused on companies small and mid caps that operate with a high relative discount in historical terms“.

In turn, from PPIin your wallet conservative international exposure for July recommended a 10% holding for the Cedear SPY ETF. And, in the case of the aggressive: SPY 40%, DIA 10%, QQQ 20%, EEM 10%.

Regarding this last option, they indicated: “Given the latest US activity data, which show a weakened manufacturing sector after the repetitive rate hikes applied by the Fed, and a resilient service sector, we decided to resume our 20% position in QQQ. To do this, we decided to reduce the position in EEM to 10% given that the recovery of the Chinese economy for the moment remains lagging, dragging the rest of the universe of emerging markets (EEM is made up of at least 70% by countries of the Asian continent). In view of benefiting from economic data that supports or lessens the contraction of the industrial sectorwe maintain our position on DIA”.