The dream portfolio for a small capital: the three best options to invest $200,000

Argentina is in a moment of strong uncertainty in economic matterswith a Government that tries to consolidate its program, but does not finish doing so, and in which price inertia remains very high and the dollar is calm. In that context, a small investor who has, for example, $200,000 available What you are looking for is to protect your pesos from very high inflation and be covered against a possible exchange rate jump, but it is not easy to define how to build your portfolio.

Ambit consulted several financial analysts in the City who outlined some options for this type of portfoliotaking into account, of course, a certain investor profile.

$200,000 portfolio: moderate profile with one year term

For Mauro Cognetta, Managing Partner of Global Focus Investmentsfor example, “the ideal way to put together a portfolio of $200,000designed for a moderate profilewith some risk and having as investment time horizon the minimum of one year” is combining Negotiable Obligations and “hard dollar” sovereign bonds.

“I would do 60% fixed income and 40% variable income”, posits Cognetta. And she details that, in that 60% ($120,000), around $80,000 would go to hard dollar bonds (such as the AL30) and 20 points (the remaining $40,000)to one YPF negotiable obligationwhich perform quite well and, although he recognizes that they have corporate risk, he highlights that “it is an important company.”

With this combination, Cognetta highlights that “a large part of the portfolio is already dollarized and with a percentage of fixed income, which provides interesting protection.” But, on the other hand, he considers that it is advisable to add a seasoning of fixed income, which improves the return. And, thus, he details that The remaining 40% would be divided into three different cedars:

• 13.3% in Vista,
• 13.3% in Bioceres and
• another 13.3% at Nvidia.

“They are three companies that I really like from the point of view of fundamental analysis. That is They have good future price prospects. And, in the case of Vista, although he recognizes that it has been rising a lot, he assures that, “as long as the company earns money, the stock continues to be on our radar.”

Meanwhile, Cognetta clarifies that “It would not enter CER bonds or dollar linked and would also rule out Common Investment Funds (FCIs)”. And these instruments today do not seem the best option to protect against inflation and, on the other hand, with a still strong stocks and a depressed official dollar, which adjusts far behind the rest of the prices in the economy, Assets tied to the dollar seem to have better long-term prospects.

A $200,000 portfolio focused on an unbeatable investment

For its part, Juan Pedro Mazza, Senior Fixed Income Strategist at Cohen SA, points out that, thinking of a small physical investor, the most interesting thing today is a UVA fixed term“which pays, by regulation, a 1% real rate and that contrasts strongly with the returns of -40% and -60% reported by CER bonds for the same term.”

Thus, according to his calculations, he estimates that a UVA fixed term has a return of 131% in pesos over six months. “For the dollar to beat that yield, it should be at $3,000 at the end of that period. That makes it very attractive today,” says Mazza.

And on the other hand, For investors who want to diversify their portfolio of $200,000, Mazza suggests betting a percentage, in the short term, on the CER bonds, like the TX24 due in March of this year.” Although it is true that it pays a real rate of -80% per year, once projected, that return corresponds to a monthly income of 10%”. And, although it may seem low Mazza indicates that “it is one of the most attractive that the peso curve offers”.

And, on the other hand, he mentions that There is also an interesting opportunity in sovereign bonds in dollars, such as GD30 and GD28which offer coverage against increases in the dollar and anticipates that “they may have large capital premiums in dollars if Argentina’s financial situation normalizes.”

$200,000 portfolio: dollarize the pesos

Finally, the financial analyst Elena Alonso considers that, for a moderate investor, with an investment period of no less than six months, The ideal would be to build a portfolio of $200,000 as follows:

• a 30% ($60,000) in cedarsmainly from the technology and energy sector,
• a 50% ($100,000) of hard dollar negotiable obligations maturing before 2025/2026, “which offer rates of 6% and 8% in dollars.”
• a 10% ($20,000) in MEP dollar
• other 10% ($20,000) in AL30 bonuses.

“All this entering in pesos and with returns in dollars”, clarifies Alonso. And he points out that this is an ideal time to make that strategy because “he who “the dollar is low”so he thinks that the best thing is to dollarize the portfolio.

Dollar vs. inflation: an uncertain market

As can be seen from the suggestions given by the analysts consulted, at the current time, All eyes are on the dollar and inflation variable and the big question is which will win the race. The market consensus is that, given what the Minister of Economy, Luis Caputo, has said through different channels recently, in the short term, inflation will beat the dollar, as has been happening in recent months.

But consider that, towards the second semester, This dynamic could turn around as a consequence of a possible decision by the Government to raise the price of the official dollar. and if, as the economic team expects, inflation moderates as a consequence of a liquefaction of purchasing power and a consequent cooling of consumption and the economy.

But The prevailing uncertainty suggests that diversifying the dollar/inflation portfolio or going towards a regulated instrumentsuch as the UVA fixed term, may be the best options.