In a context of high inflation and exchange rate volatility, the strategy with the pesos is decisive for the investor to be able to take care of his capital and fund flows. Inflation for the year has accumulated a total of 36.6% and the market expects an acceleration in the coming months. In fact, it is estimated that it will reach 50.5% for the next 12 months. Although the dollar continues to point downward, albeit with the risks of a possible devaluation and inflationary acceleration, the pesos in bank accounts will need to find some destination to prevent them from evaporating.

When looking for options for capital surpluses, in the local market the local Investment Mutual Funds industry has vehicles to be able to position resources conservatively and keep pace with inflationary and exchange rate dynamics. Within the menu appear money market funds, T+1 investment funds that dream of being vehicles for placing very short-term capital availabilities. They invest in remunerated accounts and fixed terms, with returns that do not exceed 25% so far this year. In this way, investors manage to give a short-term return to their pesos even if they lose against inflation.

Mariano Calviello, FIMA's head portfolio manager, stated that the T0 funds, due to their structure, quickly capitalize on the rise in rates in pesos as a result of the structure of their portfolio, made up of remunerated accounts and fixed terms.

Today this product yields levels of 26% of TNA, being very efficient to make short-term liquidity profitable. In the case of T1 funds, rising rate volatility results in temporarily lower returns as the fund revalues ​​to new prices that reflect these higher rates. In our case we follow a conservative strategy, limiting the duration to avoid excessive volatility in this context. At these new rate levels, the existing spread between this product and T0 is very interesting and makes it possible to improve liquidity management, both for individuals and companies, he commented.

The PPI analysts explained that the money market remains an option for very short-term flows in pesos, keeping the immediate liquidity that they allow as a clear advantage. They are purely transactional funds, which are identified with a conservative investor profile, they affirmed.

In order to beat inflation, they must assume greater risks, positioning themselves in T+1 investment funds which invest in the same assets as the T+0 but also invest in bonds that adjust for CER, bills and other types of bonds at a fixed and variable rate with greater volatility with respect to the assets that are positioned in the money market.

Given the low returns offered by the money markets, and contemplating devaluation and inflationary expectations, the pesos should look for a higher remuneration to be able to beat inflation or potential rise in the exchange rate. In this context, and within the fund industry, T+1 funds appear, since they offer higher returns although with a slightly higher risk. Within the T+1 appear the most aggressive funds and those that are more conservative.

From PPI they added that the more conservative T+1 Fixed Income funds are more similar to the T+0, and their liquidity is managed mainly through other FCIs and fixed terms.

Conservative T+1 funds tend to have lower returns than aggressive T+1 funds but at the same time higher returns than money market funds. In a way, they are improved money market funds, with superior returns and limited risk.

These can come to represent more than 50% of the average portfolios, while the rest is distributed among bills, negotiable obligations or financial trusts, mainly. These funds marked an average return of 1.9% in September, and 1.1% until the end of October. Volatility remains around 1.1%, with Tires indicative of these can range from 25% to 32% per year. These funds are presented as an option, albeit with somewhat higher risk, to the money market. However, it is important to remember that liquidity in the event of a bailout is within 24 hours, they commented.

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According to the sample drawn up by PPI analysts, the fund that earned the most last month was Schroder Renta Plus.

The Schroder Renta Plus fund is an example of conservative T+1 funds. This fund, and in line with the others in its category, seeks to maximize the profitability of short-term pesos with low risk and duration. Specifically, it shows an effective IRR of 35.28% and a duration of just 0.10, its portfolio. 35.98% of the total portfolio is invested in monet market funds, 26.99% in LEDs, 17.38% in fixed term, 6.7% in provincial bills, among its main holdings.

According to Schroders specialists, October was a more than challenging month, where the T+1 funds of the main banks underperformed their own Money Markets while Schroder Renta Plus had a much higher performance, yielding 2 .42% effectively or 29.46% annually. The company explained that "this performance is due to the active management of the fund, which I try to anticipate market movements," they stated.

In search of higher yields, in order to offer a positive real rate, t+1 funds reduce liquidity and incorporate a greater participation in assets with market risk such as ONs, bonds, Bills, etc. - and may even be exposed to dollar futures.

From PPI they warned that, a data related to their strategy is reflected in their volatility that can triple that of the most conservative funds (the average is around 2.4%). The indicative yields generally exceed 30% -today they average 32%- and although it is possible to expect some additional rise, it will depend on the portfolio behind each fund.

Regarding the returns of the T+1 funds, according to a Criteria report, Alpha Renta Capital Pesos is the fund that earns the most so far this year, totaling 96.45%, followed by Argentina Ahorro Pesos (91 .7%), Toronto Trust Special Opportunities (77.9%) and AdCap Renta Plus (75.2%)

In this case, Santander's Supergestion Mix VI funds are the largest in terms of managed capital within the category, followed by Pellegrini Fixed Income and Banco Galicia's Fima Ahorro Plus.

The analysts at Central Fondos, specialists in analysis and strategies of mutual funds, created a portfolio called Multipllica tus Pesos. This portfolio is made up of 5 common investment funds. 20% is positioned in Delta Income, 20% in Compass Fixed Income II, 20% in ST Fixed Income, 20% in Schroders Argentina and 20% in Galileo Fixed Income.

As explained by the company, the Multiply your pesos portfolio yielded 6.1% up to October 22 in just 20 days and has accumulated 73.5% in the year when inflation for the same period has been 27%.

The Multiplica tus Pesos portfolio has almost tripled inflation in 2020. From 2015 to date, the ´multiply your pesos´ portfolio beat inflation in all periods. The cumulative difference is increasing. Superior yield and the magic of compound interest do the job, they said.