He result of STEP it was a turning point for the market. The measures taken after the primary elections corrected upwards not only inflation expectations, but also the path that inflation will take. dollar until December. The framework of uncertainty in relation to the economy turned savers towards different assets, in the coverage search and that is where the Common Investment Funds (FCI) come into play.
The new players that entered the fund market rearmed positions taking into account the interest rate hike arranged by the Central Bank and the devaluation of the peso.
This volatility in the exchange scenario was also reflected in the notable growth in funds Dollar Linked which, according to PPI “not only did they gain subscriptions driven by the appetite for coverage, but the return also accompanied this demand.”
On average, the jump in the FCIs Dollar Linked was of the order of 9.4% in the first week after PASO, after a 22% rise in the official official exchange rate. However, a key fact was the strong dispersion that was reflected between strategies and funds (which reached 20 percentage points).
This proved the distrust of the market in which the Government can support the exchange rate at $350 for a long time and it is believed that these funds will grow even more towards December to try to protect themselves from a new devaluation event.
On the other hand, others that have been achieving strong interest among investors are the T+0 funds, the so-called immediate liquidity funds (Money Market) that recovered the lost position days prior to STEP. So much so that, according to PPI numbers, they came to have a daily average of $76.600 million.
The CER adjusted FCI They also returned to the scene. These they earned $48,000 million, reversing the accumulated red and adding some $33,100 million in August.
Gabriela Friedlander, Asset Manager Director at balance indicated to Ambit that the days after the devaluation of Monday, August 14, “a movement was observed towards the funds that are mostly composed of inflation-linked assets. This movement occurred in a context in which the devaluation increased the expectations of inflation by the passthrough of the devaluation towards prices. Private consultancies corrected the expected inflation for the months of August and September upwards from levels of 7%/8% per month to levels above two digits. This leads to a jump in expected inflation for all of 2023 from levels of 140%/150% to levels of 180%/200%”.
FCI: what the market sees for October
Recently, the Argentine Chamber of Mutual Investment Funds (FCI) revealed that despite the strong growth of the industry this year, the yields of the Money Market funds rose 56.4% so far this year, below the inflation accumulated in the same period.
However, Friedlander estimates that the Peso flows “continue to increase” towards the CER funds, with the objective of “seeking protection for the pesos”. In this sense, the Institutional fund is proposed, which during the year 2023, not only exceeded inflation measured by the CER index (83.63% vs. 63.35% with data as of 08/18/23).
For PPI, even with the exchange rate fixed at $350, the flows in favor of the funds Dollar Linked could be reset and their performance will keep positive in a scenario where devaluation expectations will be sustained”.
In any case, the market does not rule out volatility in fund flows due to the complexity of the country’s situation and electoral uncertainty.
FCI: which are the best performers?
According to data from this week revealed by MegaQMof the total mutual funds, the highest percentage is being taken by the Money Market (48% of the subscriptions), in second place the Fixed Income funds (29.3%) and, in third place, the Linked Dollar (9 .4%), which reveals the market trend in this context.
Despite the fact that FCI Money Market have a return below accumulated inflation, investors see a good strategy in this type of instrument due to immediate liquidity and lower risk.
Currently, those that are performing best in the different segments are the following:
Money Market (daily yield)
- Alpha Weights – Class A (97.57%)
- Adcap Saving Pesos Money Fund (96%)
- Goal Weights – Class B (95.85%)
- Delta Pesos – Class B (95.33%)
- Quinquela Pesos – Class B (94.48%)
Fixed income pesos- short term (monthly yield)
- Pioneer Income Savings Plus – Class B (31.98%)
- Optimum Flexible Mixed Income – Class B (26.58%)
- Dynamic Allaria – Class B (23.62%)
- ST Total Return – Class B (21.16%)
- Adcap Fixed Income – Class B (21.07%)
Fixed Income Dollars and Dollar Linked – Short / Medium Term (monthly yield):
- Fixed Income Capital Balance – Class B (40.79%)
- Allaria Mixed Income II – Class B (33.32%)
- Mixed Income Estate – Class B (31.19%)
- Compass Fixed Income III – Class B (29.78%)
- Delta Management IX – Class B (29.78%)
Source: Ambito
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