Investments and balloting: what to do with the pesos for November 19

In the first electoral round, the result surprised the market, since Sergio Massacandidate of Unión por la Patria, came out better positioned than Javier Mileiwho was given more chances of a better performance, so they will compete the runoff the next November 19th. Both candidates moderated their speech looking for votes of other formulas, something that would not be sufficient to clear uncertainty that persists.

The polls, increasingly less accuratenor do they show a clear winner for the Second round, which would be an indication of a closer electoral contest. Nevertheless, in the market there is consensus and anticipate economic adjustment measures after 19-N, which could be lighter, if Massa wins, and more intense, if Milei does it.

For this reason, instruments that adjust, both due to inflation and the exchange rateThe idea is not to put all your eggs in one basket. The main brokers in the City explain how the assembly is positioned of portfolios for the runoff and what instruments they recommend to be covered.

Conservative profile

Depending on the investor profile, there are different instruments to overcome the uncertainty regarding the presidential definition, while the winning candidate It’s still a big unknown. From Adcap Financial Groupin dialogue with Ambitthey suggest wallets “defensively”.

For investors with a profile more moderate and with a medium-term investment horizonthe broker suggests the “hedge portfolio”, which protects against the two most important risks of the current economy: inflation and devaluation.

This portfolio is made up by 70% in the FCI Adcap Balanced IIwhich is positioned in fixed income assets – bills and sovereign bonds – that adjust for inflation (CER), and the remaining 30% in the FCI Adcap Total Returnwhich invests 100% in instruments dollar linked (that is, they are adjusted by the official dollar) issued by leading companies. These bonds offer the most efficient coverage possible facing the risk of an eventual devaluation jump. The positioning in coverage would reach a TNA of 111%, with a duration of 1.37 years.

For its part, Maximiliano Donzellihead of research at IOL Invertionline, suggests for this investor profile a portfolio composed of 15% liquidity, 50% fixed income and 35% variable income; which includes fixed income instruments such as the GNCXO 2028 negotiable option, IRSA 2027, dollar linked TV24 bond, and other fixed income instruments such as shares of Pampa Energía, Comercial del Plata, the S&P 500, PepsiCo and some MEP dollars for give you liquidity.

Aggressive profile

The portfolio proposed by Donzelli for this profile is made up as follows: Cash 5%, Fixed Income 40% and Variable Income 55%, which includes both fixed and variable income instruments, such as: which includes fixed income instruments as the negotiable option of YPF, the GD35m ek TV24 (dollar linked) bond and a little less explosion in equities with 5% shares of Cresud, as well as liquidity with dollars in cash at 5%.

After the general elections and the probability of Massa’s victory in the second round, Market concerns about immediate dollarization eased significantly. However, several economists point out that the desirable real exchange rate is 30% above the current one in real terms.which implies a nominal jump of around 75%.

That is why, Javier Casabal, fixed income strategist at Adcap Grupo Financiero, maintains that the positioning should be in dual bonds, (TDA24 and TDG24) that should capture that additional 25%.” In this uncertain and volatile scenario for local instruments, where there are possibilities of an exchange rate jump, the Adcap Grupo Financiero strategy team recommends “move to dual and dollar-linked bonds”.

Investments, ballot and inflation

Finally, Federico Broggifrom Institutional Sales Grupo IEB, comments to this medium that, for coverage against inflation, the most precise alternative “They are the bills and bonds that adjust for inflation (CER). Currently, within these instruments “We like the T4X4 that yields inflation +5% and expires in October 2024”.

“The reason we chose this title is its expirationwhich would capture the inflationary acceleration of an eventual devaluation if it occurs”, he adds.

In this way, the portfolios are positioned for November 19, with defensive portfolios that mix different instruments that offer coverage against any scenario that may occur. However, before making decisions of this type, it is always better to have the advice of an expert.