The first thing to note is that, as indicated stock market advisor Marcelo Bastante“the CER instruments are having a very volatility strong, even intraday.” For example, This Thursday, the bonds that adjust for that index that follows inflation began rising up to 8% in some cases and ended with increases of between 1.8% and 5.4%.
This, according to the expert, is because There are still no certainties about the inflationary direction because there are still doubts about monetary policy. This was seen just a few days ago, when, given that it was expected that the national inflation rate was going to be close to 30%, they rose sharply, and later, when the data from the City of Buenos Aires came out, which showed a 21% fell sharply and the outlook calmed, they fell.
CER bonds: volatile and negative rates
In that sense, Bastante warns that, “If any investor wants to invest in these instruments, they must know in advance that they may be subject to strong fluctuations.”. In other words, these are tools that are aimed at riskier investors.
On the other hand, the F2 Financial Solutions analyst Andrés Reschini points out that “CER instruments continue with quotes that show very negative internal rates of return (IRRs) and this is because, beyond the inflation data for December, the forecasts continue to be for high inflation and the monetary policy rate remains very negative.”
In general terms, the CER adjustable bonds are expensive, have negative real rates of return, of -50 -60% (that is, they are quoted above par because they precisely adjust x CER). Yes ok longer ones have lower parities than the shorter ones, Bastante points out that the investment horizon should be at least 3 months to be able to withstand the strong oscillations that may occur.
UVA fixed terms and Common Investment Funds adjusted by CER
Reschini explains that instruments traded through the capital market discount high inflation in their quotes and assures that “that is one of the reasons why UVA fixed terms, For example, another instrument tied to inflation, continue to grow despite having been discouraged with the extension of the minimum required duration up to six months. And it is a conservative instrument, which ensures a gain of 1 point (T+1) above inflation for the year.
Thus, for Bastante, another interesting and safer alternative for a conservative investor than a CER bond is bet on some Common Fund (FCI) that adjusts for CER. The good thing about these instruments is that they are managed by a portfolio manager, who adjusts the investment portfolio depending on the context and evolution of the assets included in the fund.
Consequently, Ezequiel Estrada, director of Poncho Capital, considers that “it is interesting to maintain FCI that adjust for inflation, combined with and linked dollars for a medium-term period (3 to 4 months).” Since it considers that, in this way, an interesting diversification and protection against inflation and a jump in the official exchange rate is achieved.
With an eye on an eventual reduction in inflation
And then, As inflation goes down, it is recommended to be positioned in dollar instruments. Thus, for a conservative profile, he mentions that an FCI that adjusts for the official exchange rate and another that adjusts for inflation, CER or UVA is a good option and, as examples, he mentions AdCap Cobertura and AdCap Moneda, which last month yielded 27.43 % and 19.65% respectively.
It also mentions that negotiable obligations (ONs) are a good alternative for these more conservative profiles, although, in this case, it recommends avoiding ONs with maturities during 2024 and looking for other instruments after 2025.
However, beyond the opinions of the analysts consulted, which are an interesting guide, Bastante recommends “The investor should contact an advisor or capital market expert because they will suggest the best time to enter these bonds or FCIs, and will even be able to tell them which instrument to choose.”
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