The reason behind the interest in these instruments since they were issued is then explained. These resolve a dilemma frequently encountered by investors in the market in recent months. On the one hand, to gain exposure to instruments in pesos that adjust by CER and hedge against accelerated inflation, or, on the other hand, to opt for instruments Dollar Link to tie to the devaluation of the official exchange rate before the possibility of seeing a discreet jump. Faced with this unknown present in the day to day, the duals rescue, in principle, the best of both worlds, in a single option. In this sense, it is not surprising that since their debut they have shown a better performance with respect to the rest of the debt in pesos.
However, the value of this optionality grew with the interest of investors in these bonds. In this way, the duals were positioned below both performance curves and the recent rally was losing some strength. As an example, the spread between the TDJ23 (Dual June) and the T2V3 went from 200/250bps to the current 400/460bps, while the performance differential with respect to the TX23 it went from 100/120bps within a day of its debut to current 500/520bps levels.
Thus, for the cost of this optionality to make sense, the differential between the two adjustment variables should be wide enough. That is, for the ARGDUO exceeds the diversification of a portfolio between pure strategies CER/DLthe real exchange rate (simply defined as the difference in the evolution of inflation and devaluation) should be significant for one side or the other.
In short, duals are unlikely to preserve the post-debut rally. However, they still represent an interesting alternative when building a hedging portfolio in a context of excess pesos.
IPP Analyst.
Source: Ambito
