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What are LECAPs and how to invest in the instrument most chosen by the market

What are LECAPs and how to invest in the instrument most chosen by the market

Capitalizable Treasury Bills (LECAPs) are financial instruments that have recently become all the rage.

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After the Central Bank (BCRA) If the interest rate on fixed terms drops again, the Capitalizable Treasury Bills, better known as LECAPs, emerge as a new option for savers who They seek to protect the pesos.

Capitalizable Treasury Bills (LECAPs) are financial instruments issued by the government, designed to provide a fixed return over a specified period, usually short-term. This is a different option for those looking for a safe investment with predictable returns.

What are the advantages of investing in LECAPs

One of them is that they offer a fixed interest rate. This allows the investor to know in advance the yield they will obtain at maturity regardless of whether the Central Bank decides to continue lowering them. Furthermore, being short-term, generally They present lower volatility compared to other financial instruments of longer duration.

These letters are accessible to small and medium investorsallowing easy diversification of the portfolio.

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Investors look for alternatives to improve their performance

Investors look for alternatives to improve their performance

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What are the disadvantages of investing in LECAPs

For its part, among the disadvantages, in contexts of economic uncertainty, there is a risk that the Government will face difficulties in refinancing its debt, which may affect the payment of interest and principal. In fact, in contexts of high inflation, The fixed yield offered by LECAPs may not be sufficient to overcome the loss of purchasing powerresulting in a negative real return.

How much do Lecaps yield?

The LECAPs are yielding between 3.3% and 4.2% monthly, which, although they are below inflation levels, but compared to an FCI money market or even a fixed term, they are around 2, 5% are seen as a better alternative.

Source: Ambito

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