Bea less than three months of the legislative elections, the market adjusts positions and prepares for three possible scenarios: official continuity, opposition advance or adjusted result.
The Argentine electoral cycle has historically been a determining factor for the financial market. As the elections approach, volatility increases and investors adjust their portfolios based on expectations about the result and its economic impact. This phenomenon, known in jargon as “Electoral Trade”, seeks to take advantage of opportunities and reduce risks before the market fully discounts the result in prices.
Experience shows that each electoral scenario generates different reactions. For the legislative elections of 2025, a broad triumph of the ruling could reinforce the confidence in the continuity of the economic program, reducing the country risk and improving the attractiveness of local assets. On the other hand, an opposition victory or a fragmented congress would tend to induce caution, portfolio dollarization and preference for international assets.
In this context, a professional approach starts from three possible hypotheses and defines consistent strategies for each:
OFFICIALIST SCENARIO: IMPULSE TO LOCAL ASSETS
If the ruling manages a comfortable victory, the market could anticipate an upward cycle in Argentine instruments. In this context, a portfolio would prioritize:
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Leading actions: YPF, Grupo Galicia, South Gas Transporter (TGS).
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Sovereign bonds in dollars: GD41 (Global 2041, under foreign law) to capture country risk compression.
Opposition scenario: global diversification
If a change of course or brake on reforms is perceived, the defensive strategy is oriented to international assets:
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Yields: SPY (ETF of the S&P 500) and EEM (ETF of emerging markets) for global exposure.
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Alternative assets: Bitcoin via Ibit (Blackrock ETF Spot) as coverage against local volatility.
Adjusted scenario: caution and balance
Before a disputed result, the market tends to move prudence, combining defensive instruments with selective opportunities:
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Defensive instruments: Bopreal Series 1 C (BPOC7), Dollar Bonus issued to regularize import debts.
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Corporate bonds: Pampa Energía and Pluspetrol.
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International diversification: Spy to keep global balance.
Beyond the timely choice of assets, the key is in the Active management. He “Electoral Trade” It is not a political commitment but an investment strategy based on alternative scenarios. It implies defining its own vision, giving up the tolerated risk and executing with discipline, avoiding entering late when the market has already discounted the result.
In a year of definitions, anticipating and positioning strategically can make a difference between protecting capital or capturing differential yields. The correct reading of each scenario is the most valuable input before the polls speak.
Product Manager in Balanz
Source: Ambito
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