Argentina, PASO and the 2023 presidential election: what to invest in

Along with the demand for the dollar and crypto, these options are gaining more space in investors’ portfolios every day because of their interesting returns.

The world of investing is not easy at all.Much less so in a country like Argentina, which is mired in a challenging economic context, to which add electoral uncertainty, keeps markets in suspense.

When the outlook is unclear, the typical reaction of the average Argentine is to seek refuge in a hard currency like the dollar to hedge against devaluation and loss of purchasing power. simultaneously, The number of users willing to add to cryptocurrencies is increasing every day As an option to protect the value of your money.

but one of these two options Wide range of options that add strength to the portfolio -Whose income can be both variable and fixed- Which provides balance and diversifies risk.

Investments: Options for the Cautious Profile

For savers with a low tolerance for risk, the “sung” options are two classics:

  • “Traditional” fixed term, who tries to fight inflation; grapefruit versionwhich is higher than the increase in prices, but requires longer placement terms
  • mutual investment fund money market (offered by Market Pay and ULAand brokers), who are very tempting for instant withdrawal of funds

but they exist other orthodontic appliances which is also recommended by experts In personal finance:

  • Bail
  • discount letter (ledes)
  • Negotiable Obligation (Current)

in conversation with iProUPEconomist Joel Lupieri points out that surety (one of the most heavily traded instruments) acts as a Lending between unknown parties and arbitrated by a market platform.

“An agent with liquidity can lend his pesos to another who needs them, They have certain time limits, ranging from one day. And They are virtually ‘infallible’, as whoever takes out the loan must put up property as collateral. Which can be fixed for an amount equal to or more than the amount you are asking for,” explains the expert.

In this regard, Maximiliano Donzelli, head of research at IOL InvestorOnline, said: iProUP He Sureties Are Like “Stock Market Fixed Terms” But Much More Interesting,

“Although rates are usually lower than a fixed term, They have the flexibility of not having a maturity of 30 to 90 days, with annual nominal rates (TNA) of around 60 and 65%. If one takes it as the effective annual rate (TEA), then we talk about Actual yield between 85 and 90%, They are ideal when you have surplus funds for a few days,” opines experts.

Alejandro Bianchi, financial expert and creator of Assessor Inversion, confirms this IProUP: ,Sureties are an ultra-conservative option: If it is not canceled at maturity, the market liquidates the guarantee in favor of the underwriter. has caused Never in history, even in Corralito’s time, has this instrument missed,

Lisandro Meroi, research analyst at TSA Bursátil, explains iProUP He Discount cards are among the preferred options, Although they are issued by the National Treasury, They offer a fixed return over an investment horizon of a few months.

“In the middle of April, LEDs maturing in May and June ended with TIREA (annualized effective internal rate of return) of 127% and 130%, While they are not free of Treasury risk, they meet one of the main requirements of the most conservative investors, which is to beat fixed durations,” said expert Mann.


ON is an interesting option for buying a private loan with income in dollars

“Interestingly, today the investor receives a percentage of that value and profits from the difference between the purchase price and what is charged at maturity,” says Lupieri.

Bianchi suggests Negotiable Obligations in Dollars,Since the companies have historically shown a better compliance profile than the State, This is reflected in the low IRR (rate of return) they offer in hard currency, of the order of 6.5%, while national bonds show figures above 25% due to the high perception of default,” he explains.

Donzelli says: “ONs are bonds issued by private companies. Like other fixed income instruments, They pay coupons and can be repaid in installments or at maturity, depending on the conditions of each. can be understood as Instrument similar to sovereign bonds, but issued and backed by the assets and income of private companies,

Investing: Risk Options

TSA covers Argentine Certificates of Deposit (CEDEAR), which represent Wall Street stocks on the local stock market. They can be operated with weights, Among the options for those with a high risk tolerance.

,They are an option to capture the long term returns of variable income.without losing the base of portfolio dollarization”, he emphasizes.

bianchi says CEDEARs had strong growth“To the extent that he represented in 2022 Over 70% of everything in Argentina operated in equity“. As an example, it indicates that a package from $175,000 can be made related to companies that aim for innovation, such as Microsoft (25.6%), Adobe (22.9%), IBM (23.7 %) and AMD (27.7%).

Investing: How to Diversify in an Election Year

Betting on a diversified investment portfolio helps in mitigating the risk of each instrument. From IOL they tell that positions in this election year policies (from both the ruling party and the opposition), will target Avoid major conflicts with the markets.


CEDEAR allows betting on companies listed on Wall Street operated with the peso

“On the other hand, the local market has just registered a significant correction. In mid-January, Marvell marked its last maximum and from that date to mid-March, it was depreciating by more than 20% in dollars, “They warn. in that sense, Recommend the assembly of the following portfolios:

  • 50% in YPF Foreign Law BO (YMCHO): is guaranteed by the company’s export, Pay quarterly coupons at an annual rate of 4% until 2023, when it becomes 9%. Its annualized return in dollar terms is 9.4% per annum to date
  • 25% in Cresud’s On of Local Law (CS38O): Solvency ratio has shown positive development and indebtedness has shown improvement. It matures in 2026, pays semiannual coupons at 8% per annum, and has a dollar yield of 5.6% per annum
  • 25% on IRSA 2028 (IRCFO): It pays semi-annual coupon at 8.75% per annum and from 2024 it will go into annual capital installments, thus having five amortizations and substantially reducing the risk. In addition, to date it yields 6.6% per annum in dollars

“in our view, It is an ideal portfolio for those who want to convert their savings into dollars and points to passive income in dollarsWith the possibility of investing in small amounts”, he stresses from IOL.

It has an annualized yield of 7.2% and an adjusted maturity of 2.7 years., “It stands out because it demands a significantly lower amount than other ON portfolios that we usually recommend,” he emphasizes.

they add it to tsa bursetil Genneia 2027, IRSA 2028, YPF 2026 and PAE 2027 are among the most attractive options“With higher than average coupons and not so long duration”.

“In view of the election We believe that 50% of the portfolio should be composed of these instruments to protect capital in hard currency., it can be supplemented with a run in the lead and a share in the general investment fund focused on assets outside the country to avoid Argentine exposure,” he says.

Bianchi adds that “since the election year may mark the beginning of government more fit the marketIt sounds interesting to own one percent of Argentinian shares.”

“Bearing in mind that an international investor holds no more than 0.5% of his portfolio in Argentine equities and that a local has a greater appetite for that instrument, We believe that Mervel’s risk for a local conservative profile should be 5%, 15% for a moderate and up to 30% for an aggressiveBianchi concluded.