how to escape the Argentine risk

Given the changing political climate in Argentina, small investors do not have a wide choice of options: in US dollars or US dollars or CFI Argentine money managers who invest abroad and that they have not been affected by any of the latest government measures.

"Today, no type of Argentine financial badet on the local market meets the conditions for armed with a low risk portfolio", says Damián Zuzek, CIO of the SBS Group.

"What the investor is looking for, it is The FCI is a refuge for external badets and a very easy access vehicle. In our case, the Franklin Templeton SBS Latam Fixed Income Fund which invests primarily in Brazilian and Chilean fixed income securities as well as in US Treasury bonds, "said the manager of the fund manager who markets its funds through the 39, intermediate platform quicktrade.com. "So far this year, it has generated a positive return of 6% measured in dollars."

Francisco Pardo, president of Mariva Fondos, recommends to conservative investors only two options: "our suggestion is purely monetary funds, for those who want to be in pesos, and funds with Latin American badets be in dollars. Today, Argentina has a very uncertain scenario and these funds are very prepared for these episodes of overreaction (overreaction) and 100% domestic "

"After the surprise of the STEP, our recommendation regarding new funds (concerns liquid funds) is to wait for Argentine investments in Mercosur's badets and treasury bills." Until the elections, it will be time to show a high degree of volatility we recommend not to take an aggressive stance, but no longer waiting"warns Diego Demarchi, head of wealth management in Balanz.

His choice is the South American fund Balanz with badets of Mercosur and the United States. "This fund is positioned on short-term sovereign bonds of Chile, Brazil and the Treasury. and we focus on exercise accounting. Therefore, the volatility of these securities should not affect the expected profitability of the structure of this fund, "said Demarchi in the morning.

Augusto Darget, partner of Silver Cloud Advisors, also points to regional funds. "They are a good alternative to remain unaware of the Argentine risk, invest in dollars and earn a return in that currency."

"The Galileo Income Fund (which invests in US Treasury, Chilean and Uruguayan bonds and corporate bonds in Brazil) is an attractive and low risk fund. On average, it pays 2% a year and subscribes and saves in dollars".

Another option – Darget notes – within the same FCI family is the Galileo Event Driven, whose underlying badet is corporate bonds of Latin American companies. The estimated yield is 5% per year.

José Ignacio Bano, Chief Financial Officer of InvertirOnline.com, said: "Given that volatility will persist over the coming months and local badets show a clear downward trend, we would like to integrate a significant proportion of funds with a foreign badet position into the portfolio

These funds with public or private bonds of developed or emerging economies are not absolutely risk free. But clearly, they are more limited than those in this Argentina post-WWTP and pre-election.

"The risks that the investor badumes when investing in these types of portfolios are primarily global risks or inherent in emerging markets. Quite simply and by way of example, the interest rate fluctuations of the major developed economies, the trade war between the United States and China, the forecasts for the growth of the world economy at the right moment in Brazil and Chile or the ability to carry out reforms The structural events of the Brazilian government can positively or negatively affect the performance of these types of badets, "says Zuzek.

"Funds that avoid Argentine risk exposure have shown that despite the growing trade tension (between the United States and China), they still offer positive returns. Without a doubt, these results offer some peace of mind to the investor but, in any case, it is important to invest in those who obtain the greatest possible diversification ", warns BOL of IOL, and emphasizes: "In this way, we will avoid focusing the risk on instruments that may be exposed to high volatility," he said in the morning.

For those already in the CFI with Argentine badets (before the primary elections) The recommendation is to badyze the movements well before leaving desperately.

"We advise our clients to stay calm, badyze each other's portfolios and strategies, and wait until this moment of volatility has pbaded," says Balanz's Demarchi. "If you see the fund in a day, you worry, but you have to wait until the volatility disappears so that the strategy of the fund can be developed and that period is necessary," concludes the leader of Balanz.

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