They are not a crowd, but those who still have the ability to save face a real challenge when choosing where to invest their money. Above all, in a context with an unstable forecast and little certainty in relation to what is to come in economic matters.
The menu of tools preferred by finance experts is linked to those options that include an essential ingredient in the combo: hedging against inflation. To opt for one of the different alternatives, the first thing specialists recommend is to analyze the scenario. In that sense, Fernando Marengochief economist at Arriazu Macroanalyst and of BlackTORO Global Investmentshe thinks that “if the exchange rate does not beat inflation, CER-adjusted instruments should be chosen. If the context is the opposite, it would be necessary to see what happens with the exchange rate gap, but the portfolio would have to be dollarized. If you think about how the official dollar is with respect to inflation, the key will be how long the Government holds this policy. Likewise, he adds that “if there is fiscal expansion because you want to compensate for the loss of purchasing power due to inflation, it will have an impact on prices and the gap.”
For Paula PremrouCEO of Personal Investment Portfolio (PPI)“Argentina is paying for the excessive liquidity that spilled over during 2022 and, especially, in the second half. The gross issuance of the Central Bank to assist the Treasury reached 4.6% of GDP, being the largest annual monetary financing in the last two decades (excluding 2020 in the midst of the pandemic). In short, the mountain of pesos issued during the electoral campaign caused the inflationary acceleration that the country is going through.”.
Menu. On the table, then, in the current situation, there are alternatives such as fixed terms adjustable by UVA (Purchasing Value Unit), bills and public bonds adjustable by CER (Reference Stabilization Coefficient), private bonds adjustable by UVA and common funds of investment that invest their assets in instruments adjustable by CER and UVA. “The main investment alternatives are those that provide direct protection against inflation, basically financial instruments that directly or indirectly adjust their capital by CER or UVAwhich are indices that replicate the variation of the Consumer Price Index (CPI)”, explains Jorge VinasPortfolio Manager at Toronto Trust – BACS Asset Manager.
Frederick of Christ, professor at the Faculty of Business Sciences at the Austral University, explains the current context: “The Central Bank was raising rates in pesos and made it more attractive to stay in pesos, which in turn reduced the gap between the official dollar and the free dollar. . As the market thinks that the ‘free’ dollar will not be able to beat the rates in pesos during the next few months, we see a notable increase in time deposits”.
On the other hand, the accelerated pace of inflation and the expected rate adjustments could add one or two extra points to the price index, which is why, for De Cristo, “many are covering themselves by placing part of the funds in instruments that adjust for inflation (indexed by UVA or by CER). And a higher proportion of fixed-term deposits in pesos plus UVA over the total is effectively verified”.
Premrou agrees with the tools available in the capital market that allow seeking coverage. “In the first place, there are the CER-adjustable bonds and bills issued by the National Treasury that can be obtained in primary auctions or in the secondary market.” But, at the same time, he explains that “beyond that all these instruments have the same issuer, their main difference lies in their terms and yields”. For example, the shortest maturities (made up mainly of bills called LECER) offer less volatility, although today the great demand for this asset class causes them to show returns below inflation.
Extremes. For Viñas, “the fixed term adjustable by UVA is the typical instrument because it does not face the price volatility of other market instruments. There are also mutual funds that have a limited level of volatility and have shown efficiency in obtaining returns above inflation”.
By last, Julian ColomboHead of Public Policy of bitso, puts on the table the option of cryptocurrencies “As for the investment options that are considered, whether traditional or innovative, there is none that surpasses cryptocurrencies in the performance they have recorded in a sustained manner in recent years”, holds. Between December 2020 and December 2021, Bitcoin, the leading cryptocurrency, increased in value by 280%.
“Within the diverse panorama that cryptocurrencies contain, there are options that have already been strongly consolidated over time, such as Bitcoin, Ethereum, and other emerging ones with greater volatility. TThere is also in the crypto world the equivalent of the strongest traditional currencies in the world, which are ideal for more “predictable” or controllable investments., he adds. The reference points to so-called “stable” cryptocurrencies, or stablecoins, whose digital value is tied directly to that of a currency such as the dollar (the most popular) or other backings (gold, for example). Options for those who have the dilemma of how to invest and beat inflation. Or at least not lose by landslide.
MARCELO ALFANO
by Marcelo Alfano
