Over the last fifteen years, the Mutual funds has been driven during certain periods by a factor that is clearly anomalous and detrimental to the economy, such as the existence of the exchange stocks.
This anomaly, which has been preventing economic agents from investing their capital in the currency of their choice and/or mobilizing it freely, whether to settle debts abroad or import goods and services, has forced investors (individuals and companies) ) to having to invest compulsively in financial instruments and/or common investment funds in pesos that would allow them to minimize their losses in real terms or in dollars.
In this context, although the Mutual funds On the one hand, they were harmed by a tangle of regulations that gradually took away degrees of freedom to choose the instruments and jurisdictions in which they invested; on the other hand, they allowed them to have enormous growth in terms of assets under management, designing and offering products like Dollar Linked or CER funds. As we said when we began writing these lines, this situation is anomalous and has no parallel in any other stable capital market in the world.
Consequently, in an economy that gradually normalizes, with falling inflation, with freedom for the movement of capital and to freely choose the currency in which to invest, it goes without saying that a change will occur in the current configuration of the industry. of common investment funds. This leads us to ask the question:
What will happen in the fund industry once the restrictions are lifted?
We can find a clue if we analyze the FCI flows over the last four months in which we have seen strong redemptions in the funds. Dollar Linked and CER as the government has been showing the first favorable results in stabilizing the exchange rate and inflation.
However, the trap is still in force, so it is to be expected that when this is definitively lifted (perhaps during the next six months), these movements will intensify and the industry will see a greater drop in assets under administration. This is the negative aspect for the industry of what would be a lifting of the stocks.
We believe that staying exclusively with that would be short-sighted and lacking a long-term perspective, since a freer economy and capital market will open countless opportunities for other types of investments. In fact, Simply by rolling back some of the restrictive regulations that have been dictated over recent years, the industry would be boosted.
As an example, an important regulatory change would be to reopen the possibility for FCIs to have bimonetary share securities, which would allow investors to subscribe with pesos in funds whose underlying assets are denominated in dollars, or vice versa. Another regulation that should be rolled back is the one that at the time stopped allowing the FCIs to compute the CEDEARs as instruments of Argentina or Mercosur and that virtually eliminated the possibility of offering local investors the alternative of investing with pesos in local funds (supervised by CNV) that invested in foreign stocks.
Continuing with the regulatory aspect, we believe that the introduction of regulations that encourage voluntary pension savings through FCI would be extremely advantageous both for future retirees and to reduce the future burden for the State.
Additionally, a more stable economy will surely make the industry once again concentrated primarily in the Money Market and t+1 categories, without prejudice to the emergence of investment funds. Money Market in dollars and also alternative asset funds such as closed real estate funds (IEB recently launched the Puerto Nizuc Closed Real Estate Fund), or entrepreneurial capital funds.
In conclusion of all the above, the Lifting the stocks will surely generate a challenging situation in the mutual fund industry in the immediate future.but the long-term growth prospects that will open clearly outweigh the complications that could occur at the beginning.
Source: Ambito
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