It makes sense to look beyond the short term and look for instruments that provide stability and diversification, without depending so much on political humor.
In recent weeks, the local market once again moved to the rhythm of the headlines. Volatility became a protagonist in both stocks and sovereign bonds: After the electoral result in the province of Buenos Aires, Argentine assets suffered a sharp collapse, reflecting a market that continues to react sensitively to political gestures.
Shortly after, a brief relief came with a message from Bessent, US Treasury Secretary, supporting the Argentine government, which generated a rally of optimism among investors. But the euphoria was short-lived: the announcement that no fresh funds would arrive, but only a swap, cooled expectations again.
And when it seemed that the negative trend was consolidating, the statements of Kristalina Georgieva, managing director of the IMF, revived some of the mood, suggesting that we will soon have news of the assistance package for Argentina. The finishing touch was Bessent’s tweet this Thursday afternoon announcing the purchase of Argentine pesos by the US Treasury.
Investments: look beyond the short term
In this context of comings and goings, with prices that move more by perceptions than by real flows, It makes sense to look beyond the short term and look for instruments that provide stability and diversification, without depending so much on political humor.
While a good part of the market continues to debate whether or not it is time to increase a position in sovereigns and Argentine stocks, there are those who prefer to opt for alternatives that offer good coverage without assuming that level of exposure or stress. And instead of trying to anticipate each movement, A well-structured portfolio can provide stability, liquidity and performance, combining different instruments in a strategic way.
We already know that the Government is focusing on containing the exchange rate with the ultimate objective of controlling inflation. Their workhorse has been high rates in pesos, but they do not seem to be at a sustainable level for much longer. That’s why we are adding CER bonds to the portfolionot so much as an inflation hedge, but rather because we believe that a normalization of real rates will eventually come (a process that has, in fact, already begun). If our expectation is met, those in the middle section of the curve should benefit, for example the TZX26, which is currently yielding CER + 20% annually.
For those looking for passive income in dollars at a fixed rate that will not change no matter who wins the elections at the end of the month, one of our favorite assets is IRCPO, a Hard Dollar Negotiable Obligation of IRSAleading real estate company in the region. It can be purchased with pesos and pays interest coupons in dollars at a rate of 8% annually in March and September. Today we still find it with an attractive IRR of +7.5%, even discounting the broker’s commissions. In addition, it is possible to buy it from 1 nominal, which makes it a very accessible investment.
Finally, for the investor who directly wants to take on the Argentine risk, this month we strengthened our position in the Visa CEDEARkeeping in mind that it is a long-term investment (more than three years) and with the volatility that entails, given that it is still a variable income asset. High barriers to entry make it very expensive for other rivals to build something on a scale comparable to this giant payments network. Additionally, we believe that it will benefit from the Fed’s recent rate cut and the upcoming cuts that we expect for the remainder of the year, which would make credit cheaper, encouraging consumption and impacting more transactions for the company.
In this context, the best strategy is not to bet on a single scenario, but to diversify intelligently. Rather than trying to predict the October result and its effects on the market, the key is to have a portfolio capable of adapting and responding to different possible contexts.
* Economist. Financial Advisor. Director of Finance Mode
Source: Ambito
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