Argentina Lifts Currency Controls, a Turbulent Monday Expected

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Argentina lifts currency controls
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The day has finally arrived; speculation has come to an end. In a move that surprised the market, the Argentine government announced that on Monday, April 14, currency controls will be lifted. The South American country will implement a new managed floating exchange rate regime, with a band ranging from 1,000 to 1,400 pesos per dollar, expanding by 1% monthly.

The Central Bank will only intervene if the official dollar rate moves beyond those limits. In practice, this means the peso could depreciate by up to nearly 30% without direct state intervention, should the U.S. dollar approach the upper band limit of 1,400 pesos. On Friday, April 11, the official dollar closed at around 1,100 pesos.

Due to the restrictions, Argentina has long operated with multiple exchange rates. On one hand, there’s the parallel, illegal or “blue” dollar, which has risen in recent weeks. On April 11, it closed at approximately 1,370 pesos, widening the “gap” with the official dollar to nearly 30%. There are also the legal financial exchange rates—MEP and CCL (Contado con Liquidación)—which involve the buying and selling of Argentine bonds. As of April 11, both were trading close to the blue dollar at around 1,350 pesos.

A Long History

Currency controls have been in place in Argentina for many years. The so-called “cepo cambiario” was introduced during the presidency of Cristina Fernández de Kirchner in October 2011. Though her ideological opponent, former President Mauricio Macri, lifted it, the relief was short-lived: he was forced to reimpose controls in September 2019. His successor, Alberto Fernández, tightened restrictions further, with regulations that increasingly limited access to the dollar for both businesses and individuals.

Over the weekend, the so-called “crypto dollar”—which trades 24/7—served as a sort of market thermometer ahead of Monday’s opening, with quotes hovering around 1,330 pesos. This value, close to the top of the new exchange rate band, signals the volatility many economists expect at the start of the trading day.

President Javier Milei spoke in a nationwide address on Friday night, accompanied by his entire Cabinet. In a pre-recorded message, he announced that the exchange rate controls will be “eliminated forever,” that Argentina will receive a total of $32 billion, and that the Central Bank’s reserves will reach $50 billion.

“With this level of reserves, we can back every peso in our economy, providing greater monetary security to our citizens,” he stated.

That afternoon, Economy Minister Luis Caputo held a press conference following the Central Bank’s unveiling of phase 3 of the economic program: the long-awaited end to exchange rate controls.

The measures were announced on Friday after markets closed, in the context of a new agreement with the International Monetary Fund (IMF) for $20 billion, of which $12 billion will arrive immediately on Tuesday, April 15, according to Caputo. The figure cited by Milei also includes loans from private banks to the Central Bank and from international organizations.

According to Caputo, exchange controls have caused damage and “have affected the normal functioning of the economy.”

Regarding the IMF agreement, it includes quantitative and structural targets covering fiscal performance, accumulation of international reserves, GDP behavior, and inflation trajectory.

In terms of the primary surplus, the agreement with the IMF sets an accumulated target of 6.07 trillion pesos by May 31, 2025 (equivalent to 0.5% of GDP), and 10.52 trillion pesos by year-end (1.3% of GDP). In his speech, Milei raised the target to 1.6%.

On the reserves side, the goal is for the Central Bank to end 2025 with $4 billion in net positive reserves. This target is cumulative from December 2024 onward.

The Central Bank also announced a differentiated regime between “flows and stocks” for legal entities. Companies will be able to freely access the official exchange rate to pay interest on debt and dividends to parent companies, as long as these are accrued after January 1.

Market Expectations

There is high anticipation in Argentina regarding where the dollar will land on Monday, April 14, when markets open at 11 a.m. local time. While the market has welcomed Milei’s austerity policy, it has kept a close eye on the Central Bank’s dollar reserves.

According to analysts at Puente, “The government made concessions (to the IMF) to secure greater financing. The liberalization of the exchange market is stronger than expected, and we expect the exchange market to be virtually unified starting Monday.”

However, several questions linger. One is what level the unified or official exchange rate will stabilize at. “We expect it to remain within the bands and between the current official and financial dollar rates, perhaps after an initial overshooting,” they added.

“On Monday, the official dollar should open between the April ROFEX dollar (1,200 pesos) and Friday’s CCL (1,350 pesos). We expect it to open high, closer to the CCL (as happened in December 2015), and then settle around the ROFEX level of 1,200 pesos,” said a report by FMyA, the consultancy led by economist Fernando Marull.

Banco Galicia’s research team published a special report titled “Super Monday,” analyzing the government’s recent measures. According to the report, the exchange rate bands are “much wider than in the cases of Israel, Chile, Colombia, among others we’ve studied.” The bank says this “more closely resembles Peru’s dirty float, though the IMF Staff Report states there are no planned interventions within the bands.” The institution expects “some initial jump” in the exchange rate on Monday but believes that supply “should respond quickly” after recent weeks of uncertainty.

Earlier, in a frenetic Friday for market participants, March inflation was released and came in higher than expected: 3.7%. Looking ahead, a further rise in the consumer price index appears inevitable. FMyA estimates that April and May inflation will hover around 5% monthly before falling to below 2%, ending 2025 at 35%.

There is another important factor: legislative elections are scheduled in Argentina this year. The market is wondering how competitive Javier Milei will be, considering the likely impact that lifting exchange controls will have on poverty, inflation, and economic growth.

Miami Prepares for the CAIA Florida Spring 2025 Networking

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With Karim Aryeh, Board Member of CAIA Florida, as the main organizer, the Florida chapter of the Chartered Alternative Investment Analyst Association will host the Spring 2025 networking event for Miami’s industry to meet and build networks in South Florida. It will be next Tuesday, April 15, starting at 5 PM, at Hutong Miami, the Northern Chinese cuisine restaurant located at 600 Brickell Avenue.

The association invites industry professionals to make new connections within the investment community at a “night of drinks, appetizers, and good company.” The event is sponsored by CORPAG and Funds Society will be the media partner.

CAIA Florida, founded in 2016, has the mission to grow, strengthen, and promote education in alternative investments and network creation among local investment communities throughout the state of Florida.

To register, click here.

Apex Group Acquires FTS Tech

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Global financial provider Apex Group has announced the acquisition of FTS Tech, Inc., a move that reinforces its commitment to digital transformation in fund management. 

The acquisition brings $17 billion in assets under administration to Apex Group and adds 15 new employees. Flow’s technology will be integrated into Apex’s suite of services, offering an all-in-one digital solution for market clients. 

“This acquisition furthers our mission to drive innovation in the private markets,” said Peter Hughes, Founder and CEO of Apex Group. “We’re delivering a superior, digital-first experience and strengthening our leadership in fund services.” 

Clients will gain a range of benefits including: 

  • End-to-end private markets infrastructure that streamlines investor onboarding, data management, entity administration and compliance. 
  • Enhanced efficiency and transparency through real-time insights, automation and improved reporting tools. 
  • Scalability for fund managers, offering a frictionless operating environment that allows GPs, LPs and platforms to scale faster with administrative burdens. 

Founded in 2018, Flow provides infrastructure software that promotes transparency and communication among fund managers and stakeholders. The acquisition builds on the firms’ existing partnership, which launched Apex Ventures. 

Brendan Marshall, Co-Founder and CEO of Flow said, “Joining Apex Group allows us to scale our vision faster and bring greater innovation to our clients.”

Flow’s clients will now gain access to Apex’s full range of services, including fund administration, ESG solutions, and capital markets support. Legal advisors included Goodwin for Flow and Kirkland & Ellis for Apex Group. 

One Week After “Liberation Day”: Where Are the Opportunities?

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One week after April 2—dubbed “Liberation Day” by Donald Trump—the stream of reports from asset managers and investment houses continues, analyzing shifts in the global trade landscape, retaliatory measures by various countries against widespread tariffs, falling stock markets, and the likelihood of a U.S. recession. At the same time, webinars are multiplying in an attempt to explain this new phenomenon sweeping across the world and its possible consequences.

Nothing is more adverse for markets and investors than uncertainty—and uncertainty keeps growing. In this context, investors are wondering whether they should unwind positions, buy on dips, and which assets to turn to for shelter or hedging.

Amundi believes that unless significant progress is made in negotiations and a new trade framework is established, volatility will continue to dominate markets in the coming weeks. As a result, they’ve reduced their equity exposure.

“We continue to believe it is key to maintain equity hedges and exposure to gold. Regarding U.S. equities, we believe the impact will be more pronounced on mega-cap stocks, while the small- and mid-cap segment could benefit. As for equity allocation, we continue to favor a diversified approach that includes selective emerging markets. On duration, we remain active, with a positive stance in Europe and a nearly neutral position in the U.S.,” they wrote in a report published on April 3.

According to Román Gutiérrez, Portfolio Manager at Baltico Investments—an asset management firm licensed in the U.S. with clients across Latin America—Trump has staked all his political capital, and if the current market turmoil turns out to be temporary, resolved with quick country-by-country deals, “it’s possible we’ll be out of this maze in a few months.” But if no agreements arise and the strongest players opt for confrontation, “it will be a lose-lose situation for the global economy,” he noted.

“It’s very difficult to estimate the medium- and long-term outcomes of this economic reshuffle,” he reflected. Gutiérrez explained that the firm is looking at gold, U.S. Treasury bonds, healthcare stocks, utilities, and the domestic defensive sector with “great interest” as a way to diversify portfolios and hedge equity exposure.

However, he added that the drop in U.S. equities has been so “violent” that “soon the risk-return profile of stocks will start to support a return to risk assets.” On another note, he said that U.S. companies’ technological edge, sound management, and high productivity will help them quickly adapt to this new landscape.

For investors with a medium- to long-term horizon, Baltico suggests “understanding that history is full of corrections and bear markets, and Wall Street has always recovered from them.”

From UBS Global Wealth Management, Solita Marcelli, CIO Americas, shared on her LinkedIn profile a note signed by Global CIO Mark Haefele, answering some of the top questions raised by clients.

To the question “Should I sell equities now?”, UBS Global WM responded with a firm “no.” Their reasoning: since 1945, on the 12 occasions when the S&P 500 dropped 20%, the index delivered positive returns 67% of the time in the following year. To hedge portfolios, UBS also recommends U.S. Treasuries, gold, and hedge funds.

Meanwhile, asset manager MFS released its Market Insight on tariffs, stating that fixed income remains well positioned in the near term as an attractive asset class for reducing risk. The firm also said the case for long duration has strengthened significantly over the past week, reflecting downside risks to growth and rising expectations that global central banks may accelerate policy easing in response to a growth shock.

Within fixed income, MFS believes that lower-beta, longer-duration asset classes appear best positioned amid current market turbulence. These include securitized assets, municipal bonds, and higher-rated segments of fixed income.

For non-U.S. investors, currency exposure should be considered carefully given the negative outlook for the dollar, they added. As for equities, the global rotation away from the U.S. could continue until the U.S. is clearly seen as a buying opportunity. “That moment could come. It’s understandable that we currently favor a quality bias in asset selection, as well as exposure to lower-beta sectors,” they concluded.

From Inflation to Growth, with Recession Fears in Between: The U.S. Will Also Have to Deal with Tariffs

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Amid the turbulent behavior of most assets due to the impact of the Trump Administration’s tariff policy, the shadow of a potential recession in the U.S. is emerging amid the doubts of investors, international asset managers, and economists.

Ronald Temple, Chief Market Strategist at Lazard, acknowledges that he had long expected the U.S. administration to raise tariffs more aggressively than markets had anticipated. As a result, he now foresees more severe economic damage. “Initially, it’s reasonable to expect an uptick in purchases of certain goods, as consumers and businesses try to get ahead of the tariffs and take advantage of lower prices. However, once the tariffs come into effect and filter through the supply chain, I expect demand for discretionary items to fall significantly, as consumers will redirect income toward necessities that have risen in price,” he says.

Still, Temple does not yet consider a recession his base-case scenario for the U.S., but he notes that the likelihood has increased to the point where it could be a “coin toss” whether growth falls below zero in 2026. For now, he leans toward growth below 1%—but still positive—with unemployment rising to 5% in 2025 and core Consumer Price Index (CPI) inflation ending the year above 4%.

“There is broad negative consensus among economists about tariffs, as they are expected to hinder global trade and negatively impact GDP growth. The short-term risk of a U.S. recession has increased, pushing investors toward safer assets. The S&P 500 dropped 4.28% in the first quarter, while the Bloomberg U.S. Aggregate Bond Index rose 2.78%,” adds Mike Mullaney, Director of Market Research at Boston Partners – Robeco.

In contrast, Xavier Chapard, strategist at LBP AM and shareholder of LFDE, believes that “if tariffs remain broadly at current levels, we expect the U.S. economy to enter a recession by mid-year, which would significantly weigh on the rest of the world. In that case, a sustainable market rebound in the short term seems unlikely. Of course, markets would rebound sharply if tariffs are substantially reduced, although not fully, given the lingering uncertainty.”

The Inflation Question

According to Gilles Moëc, Chief Economist at AXA Investment Managers, tariffs will push consumer prices up by more than 2%, since roughly 10% of the U.S. consumption basket is directly or indirectly imported, according to the Boston Federal Reserve. “Part of the impact on imported goods will be absorbed by margin compression among exporters, wholesalers, or retailers. But even so, domestic producers may be tempted to raise their own prices, thanks to the protection from foreign competition that tariffs provide,” explains Moëc.

Accordingly, AXA has raised its preliminary U.S. inflation forecasts by a cumulative 1.2% over 2025 and 2026 compared to its base case, reaching 3.6% and 3.8%, respectively. However, this also feeds back into a slower U.S. economy. “By 2026, the U.S. economy will still be feeling the effects of a second-round shock, though it may benefit from fiscal stimulus—if the administration can get Congress’s approval. That, however, is uncertain, as early signs of dissent on the tariff issue are emerging among Senate Republicans. An even more fundamental question will be the timing and extent of support the Fed will be willing to provide,” he adds.

On that note, Mark Haefele, Chief Investment Officer at UBS Global Wealth Management, argues that the Fed faces constraints in its ability to manage slowing growth due to the inflationary impact of tariffs. Nevertheless, he expects that ultimately the Fed will prioritize growth and financial stability if the labor market or the functioning of financial markets weakens significantly.

“Although tariffs will initially drive up U.S. consumer prices, much weaker domestic demand acts as a deflationary force, which could more than offset the impact of tariffs in the medium term. Moreover, long-term market-implied inflation expectations have declined over the past two weeks, which could reinforce the Fed’s likely inclination to focus on supporting growth rather than fighting inflation. We expect the Fed to implement interest rate cuts of between 75 and 100 basis points during the remainder of 2025,” says Haefele.

Cybercrime Surges, But Most Consumers Still Ignore Cyber Insurance

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Despite the growing risk of cybercrime, most consumers remain hesitant to purchase personal cyber insurance. A new report from the Insurance Information Institute (Triple-I) and HSB revealed that three-quarters of consumers have had their personal information lost or stolen, yet 56% of insurance agents say their clients don’t value cyber insurance. 

While 84% of agents see personal cyber coverage as essential, only 43% believe their clients understand its importance. These findings are troubling, after the survey revealed that 28% of consumers have had their social media accounts hacked, 23% experienced data breaches and 14% have been targeted by online attacks. 

The most common cyber threats reported by customers include: 

  1. Identity theft and fraud
  2. Online fraud and scams
  3. Computer malware and device attacks
  4. Exrtotion
  5. Online harassment 

However even though 77% of agents have offered cyber policies in the past month, price and coverage concerns continue to deter consumers. Further findings revealed more than half of agents believe customers would be willing to pay up to $100 for coverage, but many remain skeptical of its necessity. 

“The disconnect between the alarming rate of cybercrimes and the low adoption rate of personal cyber insurance is striking,” said CEO of Triple-I, Sean Kevelighan. 

As cyber threats continue to intensify, bridging the awareness gap is crucial. Insurance professionals must emphasize the growing risks and benefits of cyber coverage before consumers find themselves victim to digital attacks. 

Bob French appointed as CIO for Parkwoods Wealth Partners

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Parkwood Wealth Partners has appointed Bob French, CFA, as its new CIO and Head of Marketing. With almost two decades of experience, French adds a wealth of knowledge in investment strategy, portfolio management and client education. 

French’s career has been marked by his focus on evidence-based investing, specifically through his roles at Dimensional Fund Advisors, McLean Asset Management and Retirement Researcher. In his new role, French will lead investment strategy, portfolio management and digital marketing initiatives to expand client engagement and advisor support. 

“Bob’s passion for evidence-based investing and his ability to clearly communicate complex strategies will significantly enhance our ability to serve clients,” said Al Sears, CEO of Parkwoods Wealth Partners. 

French plans to introduce targeted webinars, advisor training and thought leadership content to strengthen Parkwoods’ educational efforts. 

“I look forward to contributing to Parkwoods’ ongoing growth by helping clients and advisors navigate investment decisions with greater clarity and confidence,” said French.

JPMorganChase Launches New Organization MSFCP.org for students

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For many college students, financial instability is just as much a hurdle as their academic challenges. JPMorganChase aims to change that with the launch of MSFCP.org, a new organization dedicated to improving students’ financial health and academic success. Building on the Money Smart Financial Coaching Program (MSFCP), this initiative blends financial coaching with education to help students manage their money, stay in school and secure well-paying jobs after graduation. 

Backed by $1.9 million in philanthropic funding and fiscally sponsored by FJC, the program is set to reach at least 1,500 students nationwide. Originally developed at SUNY Westchester Community College and incubated by the National Council for Workforce Education, MSFCP has proven its ability to make a difference. Now, JPMorganChase is taking it to the next level by introducing local Chase Community Managers as guest lecturers, partnering with professors to reinforce financial education and giving students real-world tools to take control of their finances. 

“MSFCP empowers students to make informed financial decisions, ultimately enhancing their academic performance and increasing their likelihood of graduation,” said Darlene G. Miller, Ed.D., Executive Director of MSFCP.org. 

The program’s success is rooted in years of development. From 2014 to 2021, JPMorganChase supported SUNY WCC in shaping MSFCP and showed tangible results. Within three months of joining the program, one student paid off two credit cards, built an emergency savings fund and decided to continue their education. Encouraged by a 91% persistence rate among participants, JPMorganChase partnered with NCWE in 2021 to expand the program nationwide with a $2.5 million investment, bringing it to colleges across New York, Michigan, North Carolina and Washington State. 

The impact has been significant. Students have learned how to budget, save, and manage their debut and have seen measurable improvements in their financial well-being. Participants have increased their savings, reduced debt, improved credit scores and achieved higher retention rates compared to national averages.

Recognizing the need for sustained support, JPMorganChase is leveraging its extensive network to make financial education more accessible. With nearly 5,000 branches nationwide and a team of 150 Community Managers, the firm is committed to strengthening financial stability in communities. Over the next five years, it plans to hire 75 more Community Managers, open new branches and renovate 1,700 locations to expand access to financial resources.

 “At JPMorgan Chase, we know that when we equip students with the tools and knowledge they need to take control of their financial futures, we are setting them up for success in school and beyond, and we are proud to support the launch of this expanded initiative,” said Diedra Porché, Managing Director and Head of Community and Business Development at JPMorganChase. 

Currently, MSFCP.org is working with 10 post-secondary institutions, including a pilot program with the City University of New York. With plans to expand to four more colleges by 2027, the initiative is well on its way to transforming how students approach financial health﹣setting them up for long-term success both in and beyond the classroom. 

The Dollar Moves From Doubts to Recovery: Are We Heading Toward a Tripolar World?

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The Fed gave the dollar a lift last week by keeping its monetary policy unchanged and signaling that it is in no rush to cut interest rates in upcoming meetings. According to experts, from January to March 25, 2025, the U.S. dollar has shown a weakening trend against the euro. Specifically, the exchange rate moved from 1.0352 dollars/euro to 1.0942 dollars/euro on March 18. Will the dollar be able to maintain its historic leadership?

“In this world, the dollar reigns because it is perceived as the least risky currency. Internationally, there’s an anti-Gresham’s law whereby good money drives out bad money, and the good one is the dollar. In this context, the euro has tried in vain to compete with it, and the BRICs’ attempt to create another currency has been inconclusive,” says Philippe Waechter, Chief Economist at Ostrum Asset Management, an affiliate of Natixis IM.

In his view, the world is changing, and the imbalances that now characterize it no longer point toward an expansion of globalization, but rather toward a more localized refocus. “The U.S. is adopting a more isolationist policy with China and Europe, which are not considered allies on the international stage. This new approach, forced by Washington, could translate into a form of distrust toward U.S. values and the dollar. A more vertical world, reinforced borders, and reduced trust in the greenback are ingredients that favor the formation of a kind of tripolar world. A long time ago, economists envisioned such a tripolar framework. Each pole would focus on a country (the United States and China) and a geographic region (the eurozone), but also on a currency. Countries tied to the reference country would have a fixed exchange rate with the reference currency, which would fluctuate against the other two,” theorizes Waechter.

A Weak Dollar: A Risky Bet

The dollar is the cornerstone of the global financial system, and its strength has historically been a stabilizing factor for international markets and a safe haven in times of crisis. However, according to José Manuel Marín, economist and founder of Fortuna SFP, the new devaluation strategy aimed at making U.S. exports more competitive could undermine global confidence in the currency.

“Lower confidence in the dollar could trigger capital flight and inflationary pressures in the United States. In addition, countries holding dollar reserves could begin to diversify them, further weakening its position as the global reference currency. This would create an environment of instability in international financial markets, where the dollar would cease to be the ultimate safe asset,” explains Marín.

The economist recalls that historically, dollar weakness has been a tool used by the U.S. during times of crisis, but it has also brought unintended consequences, such as more expensive imports and an increase in the cost of living for Americans. “It could also encourage other nations to strengthen their currencies or seek alternatives to the dollar-based system, weakening U.S. financial hegemony in the long term,” he adds.

The Fed Breathes Life Into a Recovering Dollar

Leaving theory aside, what we’ve seen is that last week, the dollar regained ground against major currencies, driven by the Fed’s hawkish stance and some fairly encouraging U.S. data. “Investors’ main fear lately has been that Trump’s unpredictable tariff statements could send the U.S. economy into a sharp and uncontrolled downturn. So far, at least, this hasn’t shown up in the data, as last week’s labor and housing market reports surprised to the upside. Preliminary March PMI figures could go a long way toward easing recession fears. However, all eyes will be on the presentation of reciprocal tariffs scheduled for next week, which is the next major risk event for financial markets,” explains Ebury in its latest report.

This recovery seems to be continuing. “The dollar continues to advance against the common currency as investors digest last week’s Fed meeting. Likewise, comments from Atlanta Fed President Raphael Bostic encouraged greenback buying, as he noted yesterday that he expects only one rate cut this year. With all this, the euro/dollar pair, already down for four consecutive sessions, fell another -0.1% on Tuesday morning, settling at 1.079 euro/dollar. Meanwhile, the euro/pound pair is currently flat. After falling -0.2% yesterday, the euro/pound remains steady at 0.836 euro/pound,” notes Banca March in its daily report.

A New Era for the Euro?

According to experts, the U.S. dollar is one of the victims of Trump’s erratic policy, which also jeopardizes its role as a safe-haven asset. “At the same time, the new European context has created room for improved sentiment toward the euro. For this reason, we have revised our euro/dollar exchange rate forecast upward to 1.05 for both the 3- and 12-month horizons. As long as Trump maintains his aggressive tariff strategy and is willing to endure economic pain, the dollar will remain constrained, even if the U.S. retains its interest rate advantage and cyclical strength,” explains David A. Meier, economist at Julius Baer.

In this regard, the euro seems to have taken a constructive turn. According to Claudio Wewel, currency strategist at J. Safra Sarasin Sustainable AM, Germany’s historic fiscal shift has significantly improved the euro’s growth outlook and challenges their previously negative view of the currency. “The sharp rise in Bund yields has significantly strengthened support for the euro against the U.S. dollar, though to a lesser extent against the Swiss franc, in our view. However, markets continue to overlook the risk of political setbacks, including a potential repeal by the German Constitutional Court. In addition, Vladimir Putin has expressed reservations about Ukraine’s proposal for a temporary ceasefire, reducing hopes for a near-term peace deal. Finally, the euro’s tariff risk premium remains relatively low, making it vulnerable to a possible escalation of the trade war between the U.S. and the EU,” he concludes.

New Limit on Structured (Alternative) Products for Afores: Which Way Will the Scale Tip?

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The CONSAR announced a modification to the investment regime of the AFOREs: the limit for investing in structured instruments (alternative assets) will increase from 20% to 30% (press release). This expansion is subject to the conditions that will be established in the Circular Única Financiera (CUF), which is still pending publication.

Although the market remains on hold awaiting these guidelines, it is worth reviewing how AFOREs’ preferences have evolved over the past three years.

At the end of February, the assets under management of the AFOREs amounted to 343.317 billion dollars, of which 29.860 billion (8.7%) were invested in structured instruments, both local and international, at market value.

Of that total, internal estimates suggest that 4.3% corresponds to local investments (CKDs) and 4.4% to international ones (CERPIs). Considering that by regulation at least 10% of the CERPIs’ portfolio must be invested in Mexico, at least 0.4% of that 4.4% also has a national component, bringing the total proportion of local investment to 4.7% and international investment to 4%.

Now, if instead of market value we consider committed capital, the picture changes, and investment in structured products rises to 19.9% of total assets, which is a level very close to the regulatory limit. Of that percentage, 42% corresponds to CKDs (local investments) and 58% to CERPIs, consolidating the portfolio’s tilt toward international vehicles.

At market value, local investments stood at 16.885 billion dollars, while international investments reached 17.300 billion dollars as of the end of December, marking 2022 as the point when the market value of CERPIs began to surpass that of CKDs.

However, when reviewing the commitments of each, there are differences that favor international investments: 39.634 billion dollars in CERPIs vs 26.696 billion dollars in CKDs.

The age of the CKDs (2009) reflects a favorable trend in distributions, which as of the end of December 2024 stands at 10.648 billion dollars, while in the case of the CERPIs (2016 and international in 2018), it barely reaches 1.089 billion dollars.

In the last three years, new placements have favored CERPIs over CKDs in both number of funds (155 out of 161) and committed capital (82% of the total issued between the two).

The new CERPI issuances have been allocated to fund of funds and feeder funds of the AFOREs, with an amount totaling 22.739 billion dollars, which represents 96% of the committed capital. These investments have gradually allowed the AFOREs to invest in international funds between 2021 and 2024.

From the CKD issuances, commitments have been channeled primarily to the energy sector (92%), private credit (3%), and real estate (3%).

The new limit on alternatives (structured products) represents more than just a percentage increase—it is a silent warning for the local market. If CKDs fail to adapt to an environment where efficiency, diversification, and results are a priority, they risk falling behind compared to vehicles that are much more aligned with the AFOREs’ global vision.