The liquidity generated by the Central Bank (BCRA) last year it flowed to the market and the Common Investment Funds They received a large part of this liquidity throughout the year, mainly towards transactional segments, that is, money market funds and T + 1 mutual funds with a rather conservative profile.
Money markets are usually a tool to manage short-term liquidity, and although they do not beat inflation, they achieved returns of more than 25% in pesos in 2020. Almost 60% of the pesos that went to the fund industry they were invested in money market funds, leaving aside medium-term investment funds.
According to a Criteria report, the FCI industry ended the year with assets under management of $ 1.9 trillion, which implies all-time highs in pesos. The variation in the year was notable since the beginning of 2020, the funds managed $ 805,000 million. In this way, the growth of pesos within the industry more than doubled, increasing $ 1.09 billion or 136% in 2020
When segmenting the different classes of FCI, it is observed that the industry became very transactional, since most of the money that flows to the managers is destined to money market funds.
Financing to households will continue to be supported by subsidized rates and especially by the Now 12 and Now 18 programs. Deflated personal and corporate loans, very timid
By ANA CLARA & nbspPEDOTTI
According to the report, 54.87% of the total flows within the industry are oriented towards money market funds and 9.4% to medium-term funds in pesos. In this way, the funds that seek to manage short-term liquidity reach 64.3% of the total for the industry.
The remaining 35.6% of the assets managed by the funds go to asset management funds, that is, medium and long-term bonds and stocks.
Somehow, This dynamic shows the lack of investor confidence in Argentina’s risk assets, since the money markets do not assume financial asset price risks.
Money Market Funds
According to the survey carried out by the 1816 consultancy, on average the money market FCIs had an average return of 25.25% throughout 2020. These funds invest mainly in remunerated accounts, fixed terms and guarantees, seeking to have no price risk and providing an interest rate for the pesos deposited in the account.
Alejandro Kowalczuk, Director of Asset Management at Argenfunds He explained that the money market fund that he manages seeks to position itself basically in assets without price risk.
« Our money market is pure, that is, it is invested in accounts paid in traditional and pre-cancellable fixed terms. The capital is managed based on whether there are expectations that the interest rate will rise (or not). In this way, if the expectation is in a rate hike, we usually maintain positions in remunerated accounts, awaiting the rate hike and then allocate more capital to fixed terms once the rate is raised. Also the performance depends a lot on the rates that are achieved. In the case of banks, when crossing placement between them they usually have better rates. The return also depends on the level of risk that the portfolio manager wants to assume. In our case, we seek to maintain a AAA rating with respect to our counterpartsyes, ”he explained.
Within the FCI category, the mutual fund that had the best returns was the Quinquela Pesos, from Quinquela Fondos, gaining 27.15% in 2020. This is followed by Premier Renta CP in pesos from Supervielle gaining 25.94% in 2020 and IAM Ahorro pesos from Industrial Asset Management, which obtained a return in 2020 of 25.7% in 2020.
Nicolás Suárez, Portfolio Manager of Quinquela Fondos He explained that the explanation for having good returns was that they positioned the portfolio in the most efficient way trying to anticipate the different events that characterized 2020.
« During the year we went through periods of high liquidity and difficulty in obtaining competitive investment alternatives such as moments of strong bailouts in the industry derived from both uncertainty, public debt placements, and the characteristic cycles of each year. Using the instruments that best adjusted to each market situation, the fund was always invested, being able to absorb the equity volatility that characterized 2020 without major stress, « he said.
According to the survey, the T + 0 fund with the highest market share in the market is the FIMA Premium of FIMA funds and is directed by Mariano Calviello, Head Portfolio Manager of Fima Funds. Calviello pointed out that during 2020 the product was notably consolidated, becoming a very important alternative for liquidity management, both for individuals and companies.
“The FIMA Premium fund makes it possible to make profitable short-term placements, therefore its performance must be associated with very low volatility. Due to the characteristics of the product, its performance is closely related to the evolution of short-term interest rates, since its portfolio is invested in paid accounts and fixed terms. In a volatile context, we prioritize maintaining liquidity, which is very well paid, without lengthening the maturities of fixed terms, which allowed us to quickly monitor rate increases« , said.
In addition, looking towards 2021, Calviello added that, in the current context, due to performance and volatility, we understand that it will continue to be a competitive product, especially for short-term placements.
« We will maintain conservative management, prioritizing liquidity and short duration of term placements« , draft.
T + 1 Funds
Another category of short-term investment funds in pesos, although with a higher level of risk, appears the T + 1 funds, which invest in higher risk assets, achieving higher returns.
Among the funds that earned the most in 2020, according to the Criteria analysts’ survey, is the Alpha Renta Capital Pesos fund (+ 110%), followed by Arpenta savings Pesos (107%), Toronto Trust Special Opportunities (90% ) and the IAM Renta Plus (83%)
When explaining the causes of the positive returns that the Bind T + 1 fund had, Martin Salvo, portfolio manager at Industrial Asset Management pointed out that from the company they were one of the first and few funds that strongly bet on the recovery of the peso curve.
« Coincidentally, in 2019, at the IAM Renta Plus we did not have Lecap but we did have a stumble with FY20 in February. Likewise, we understood that there was a clear message in rebuilding confidence in the sovereign peso curve and we put together the fund’s strategy accordingly. The second part of the year with the normalized curve, we focused more on CER products and the new dollar-linked variants, « Salvo explained.
Looking ahead, he considered that the authorities face multiple challenges for the coming year and it will be essential to find a balance between rate and depreciation that makes competition more even.
“A little bit the great appetite and flow for dollar linked funds speaks of who is winning the game today. Unlike other years, perhaps there is a lot of expectation in the first semester between the yields of the heavy harvest, the renegotiation with the IMF and the first inflation data. PoAt the moment, we continue to prefer CER-linked instruments, rate synthetics with Rofex and rather defensive positions« , Held.
Within the category, the funds with the highest market share are the Pellegrini Fixed Income of Banco Nación with 13.07% and the Supergestión Mix VI of Banco Santander with 11.4%.
Aníbal Merino, Portfolio Manager of Santander Asset Management (SAM) Argentina commented that SAM’s Supergestion Mix VI is a benchmark fund in this segment with assets under management of $ 14,271 million.
« The fund’s strategy has always been characterized as being one of the most conservative in the segment, always prioritizing liquidity and the credit rating of the instruments in which it invests. Throughout 2020, the fund has maintained between 40% and 50% of its portfolio in immediately liquid assets such as remunerated checking account, money market FCI and pre-cancelable fixed terms under pre-cancellation conditions. As confidence in the markets in short-term pesos recovered, we incorporated some sovereign, sub-sovereign and corporate debt instruments that led the fund to obtain a yield of 32.4% in the year ”, he stated.
In turn, he added that, “with a view to 2021 we believe that it will once again be a year of abundant liquidity in pesos in which the T + 1 fund segment will once again be one of the great beneficiaries of inflows to the industry. Of funds ».