Bye fixed term: what is the investment in pesos that already beats inflation

The latest official inflation data – 3.5% in September – surprised the market. However, expectations are reconfigured for October, a month in which price dynamics are expected to be around 3%. This is what he anticipated JP Morganwhich estimated that the Consumer Price Index (CPI) for the tenth month of the year could be at 3.1%. In this context, the question returns among investors:Capitalizable Treasury bills (Lecaps) or fixed term?

Lecaps are debt instruments issued by the Ministry of Economy in the short term through periodic tenders. These issues usually offer higher rates than the Central Bank’s reference rate. In the last calls of the Treasury, the organization offered higher yields than those of the secondary market, although over time these rates tend to decrease.

Thus, the yield of the bill closest to maturity, dated October 31, reached a nominal annual 45.01%, which is equivalent to a monthly effective rate of 3.44%. In this way, when comparing the yields of Lecap with fixed-term deposits, it is obtained that the best rate available on the market is approximately 40% nominal annual rate, which is equivalent to a monthly effective rate of 3.29%, below the Lecap.

Furthermore, the advantage of Lecap is liquidity, since unlike the fixed term, which requires waiting for expiration to access the money, the bills can be sold on the secondary market at any time, allowingí greater flexibility in the face of a cash emergency.

Lecaps under the city’s magnifying glass

In statements to Scope, Mateo Reschinihead of research at Inviu Argentina, maintains that in the short term, Lecaps will outperform the fixed term and “will continue to do so” in the near future. However, looking a little further, there is a possibility, although he does not see it as very likely,”that the projected inflation of 3% does not materialize“.

In that case, the strategist believes that it could be convenient to incorporate some CER bonds to strategy, to adopt a more speculative profile. An interesting example is the TZX26a bonus adjusted by CER coefficient “no coupon issued by the Government, currently offering an attractive yield“, he assures. “For the short term, Lecaps are the best option, especially for cash management within 90 days. And for those who have greater capacity, after May there could be other opportunities,” the strategist slides.

Leandro Monnittola, financial analyst, indicates to this medium that, strictly speaking, Lecaps are more attractive over the fixed term and the trend is sustained. “With an Annual Nominal Rate (TNA) that ranges between 41% to 54% depending on the maturity. Therefore, they are positioned well above the traditional fixed term (37% TNA),” the strategist shoots.

Monnittola comments that in this process of disinflation, with an estimate close to 3% for October, the TEM of the Lecaps are quoted between 3.5% and 3.67%. ‎ “The trend is that the understanding of rates continues its course, along with the inflationary deceleration. As maturities are carried out, we are going to see lower rate cuts in the next tenders. Perhaps only returns above the curve in the longer ones in search of gaining duration,” he says.

So, Monnittola recommends Lecaps S11N4 and S29N4 for the short term. For the medium term, the middle section that should be adjusted is performing on the curve: S31M5 and S28F5.

For its part, Pablo LazzatiCEO of Insider Finance, says about Lecaps that, “If investors anticipate further declines in inflation, demand could increase, making it advantageous to fix rates today“. Therefore, the most promising Lecaps at the moment They are S31M5 and S12S5. And remember that in the short term, “drastic changes are not expected, but moderate optimism is projected for the medium term“.

The strategy recommended by experts

How well the investment advisor explains Gaston Lentinithe investor discussion today focuses on deciding between an optimistic or conservative position. “If we choose to be optimistic, we expect inflation to continue to decline, which would imply that Lecaps rates follow that trend,” he maintains. However, remember that the State issued other one-year securities with returns close to 50%. Here the dilemma arises: Long-term instruments offer higher returns compared to short-term ones. This divergence shows that instead of choosing between one or the other, it is best to diversify.

For the strategist, if inflation is slightly higher or the investor has more time, they could opt for a longer-term instrument. However, if it is a company or you need the money short, “It is more prudent to opt for Lecaps, despite yielding less, to ensure the availability of capital“.

Finally, Lentini states that a viable alternative would be to invest in a Common Investment Fund (FCI) that adjusts for inflation and that includes Lecaps, since there are funds with mixed strategies that offer fixed rates through Lecaps and also capture part of inflation. “This would allow us to be covered against a possible price increase, as could happen if rates are adjusted.” Although the strategist considers that the Government will continue with its efforts to keep fuel prices under control and thus contain price dynamics.