The US Offshore Industry on Alert Over H-1B Work Visa Fees

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The Trump administration’s decision to impose a $100,000 fee for each new H-1B work visa has put the US Offshore investment industry on alert. While the measure primarily affects technology companies, it also impacts the financial sector—especially the one centered in Miami—which employs a large number of highly skilled foreign workers.

Sources consulted by Funds Society did not rule out potential legal challenges to the recent measure, which they described as “widely counterproductive” for talent acquisition, innovation, and economic growth.

The H-1B visa category allows employers to petition for highly educated foreign professionals to temporarily work in “specialty occupations,” the NGO The American Immigration Council explained in a note. These jobs require at least a bachelor’s degree or its equivalent. Generally, the initial duration of an H-1B visa is three years, but it can be extended up to six, it added.

An analysis published by Business Insider, based on public data from the U.S. Department of Labor and the U.S. Citizenship and Immigration Services (USCIS), determined that the financial entities most affected by this measure will be the largest ones—including JPMorgan Chase, Goldman Sachs, BlackRock, Fidelity, and Vanguard, among others—based on the number of such visas requested in previous years. However, smaller companies will also be impacted by the change, as they lack the financial capacity of large corporations to absorb high upfront costs.

Initial Shock and Consequences

“This policy change is widely seen as counterproductive for attracting top-tier STEM talent (Science, Technology, Engineering, and Mathematics) and supporting economic growth,” stated Ignacio Pakciarz, co-founder & co-CEO of the global multi-family office BigSur Partners, headquartered in Miami.

Pakciarz emphasized that China responded quickly with the launch of the K visa program, aimed at young STEM professionals. This visa is explicitly designed to attract recent graduates and professionals in scientific and technological fields. “Unlike the H-1B, it does not require employer sponsorship, covers a wide range of academic, scientific, cultural, and business activities, and offers multiple entries with longer validity and extended stays,” he explained. “The policy shift signals China’s intention to lower barriers for foreign talent as part of its innovation strategy,” he added.

“Although Trump’s previous policies and executive orders have been favorable to the tech, AI, and crypto sectors—offering regulatory clarity, supporting innovation in digital assets, and positioning the U.S. as a global leader in crypto—this new visa fee proposal runs counter to those goals,” he added.

Studies and expert committees in both the United States and the United Kingdom have shown that high visa costs are a major deterrent for highly skilled migrants in STEM. According to the MFO, empirical research has found a positive relationship between international STEM migration and innovation output: “The greater the number of H-1B visas issued, the higher the number of patents, startups, and tech jobs in the host economy. Conversely, policies that restrict access through excessive fees reduce the inflow of highly skilled workers, thereby decreasing overall innovation and long-term economic growth.”

From Boreal Capital Management Miami, its CEO Joaquín Frances indicated that although the decision did not catch the firm by surprise—given the Trump administration’s increasingly restrictive approach to immigration—“we believe the measure could have been implemented with more nuance, for example, applying the fee only to applicants from countries with a higher concentration of H-1B visas. It remains to be seen whether this order will be challenged in court in the coming months, something that seems likely given its magnitude and consequences.”

In Response to the Economic Impact

Faced with the economic impact of the new fee, companies could explore various strategies to mitigate its effects. “One option is to strengthen internal training programs, investing in the development of local talent to fill highly specialized positions,” explained the CEO of Boreal, a company of Mora Banc Group.

Alternatives to the H-1B Visa

“Likewise, there is the possibility of relocating certain teams or functions to other countries, thus avoiding the need to move foreign personnel to the U.S. Lastly, in some cases, it may be possible to apply for an O-1 visa instead of the H-1B,” he added.

The O-1 visa is intended for individuals with extraordinary abilities in fields such as science, education, business, arts, or sports, and requires clear evidence of nationally or internationally recognized achievements.

For its part, the BigSur Partners paper outlines a series of alternative policy measures, notably the need to expand the Optional Practical Training (OPT) program for STEM graduates, allowing several years of post-degree work experience to facilitate the transition from studies to a professional career and help employers assess candidates’ suitability “without lottery barriers or fees”; waiving residency requirements for such graduates; and also calls for “comprehensive immigration reform,” focusing on reducing costs, increasing efficiency, and aligning policy with labor market needs, “with the goal of making the U.S. a more attractive destination for world-class talent.”

The MFO’s position is made clear in the report’s closing statement: “Overall, the evidence and policy guidance conclude that reducing bureaucracy, lowering costs, and increasing long-term residency pathways are much stronger incentives for global STEM talent than imposing or raising high visa fees.”

MFS Launches a New Active ETF: This Time, U.S. Mid-Cap Stocks

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Global investment manager MFS has launched the MFS Active Mid Cap ETF (NYSE: MMID), which will invest in both growth and value companies, with the objective of achieving capital appreciation.

The MFS Active Mid Cap ETF is the firm’s sixth active ETF, and with this launch, the asset manager further expands the range of options available to clients, providing access to its proven active investment capabilities through a U.S. mid-cap core equity strategy.

“MMID expands the options for our clients to access the considerable opportunities within the U.S. mid-cap equity market. Our existing strategies in this segment have a well-established track record, supported by our Global Investment Platform, and we are excited to add this new strategy to help investors take advantage of this dynamic area of the U.S. equity market,” said Emily Dupre, National Sales Director at MFS Fund Distributors.

Kevin Schmitz, an experienced small- and mid-cap equity manager with 30 years of investment experience, will be responsible for managing the portfolio, supported by the firm’s Global Investment Platform, which comprises more than 300 investment professionals.

Schmitz joined the firm as an equity analyst in 2002 and assumed portfolio management responsibilities for the U.S. mid-cap value strategy in 2008. He also led the U.S. small-cap value strategy from its inception in 2011 through 2024.

“We are pleased with the early success of our first five active ETFs and excited to maintain that momentum by adding a mid-cap core active ETF to our product lineup. We believe it will be well received by our distribution partners and can deliver meaningful value to a diversified portfolio,” added Dupre.

The firm launched its first active ETFs in 2024, and as of August 31, 2025, the initial five active ETFs held approximately $750 million in assets. With the addition of MMID, these six funds now represent key segments of both the equity and fixed income markets, around which investors can build core market exposures—benefiting from the flexibility and tax efficiency offered by the MFS ETF structure.

MFS active ETFs are available on major U.S. brokerage and wealth management platforms.

Nvidia + OpenAI: An Alliance With Systemic Potential

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The announcement of a strategic alliance between Nvidia and OpenAI marks a new milestone in the race for leadership in artificial intelligence. Nvidia has committed to investing up to $100 billion to finance the deployment of at least 10 GW of capacity based on its GPUs, using the new Vera Rubin architecture, which will replace Grace Blackwell as the technological spearhead. The first phase will enter operation in the second half of 2026.

This collaboration adds to other significant initiatives by both companies: OpenAI has already worked with Microsoft, Oracle, and the Stargate consortium, while Nvidia has intensified its strategic alliances, including investments in Intel and agreements with players in France and Saudi Arabia.

From a financial standpoint, although the contract details are still unknown, the construction of a 1 GW data center implies GPU investments in the tens of billions of dollars, which could be reflected in Nvidia’s results in the coming years.

Preference for GPUs and Signals in Market Sentiment


This agreement, together with the previous deal between OpenAI and Broadcom, reinforces the perception that GPUs continue to be preferred over ASICs for inference tasks, even once models are trained. However, Monday’s stock market reaction—a moderate drop in Nvidia shares—reveals that investors are beginning to interpret this news as subtle warnings.

Behind this skepticism lies the business structure: Nvidia has been investing in cloud-based startups that rely on its GPUs. This “circular relationship,” where the provider funds its own customers, now shows a scale that unsettles some analysts.

Valuations and Systemic Risks: Is History Repeating Itself?


Although current valuations of big tech companies have not yet reached the levels of the dot-com bubble or the Nifty Fifty of the ’70s, they remain demanding. The recent rally in fixed income has allowed investors to maintain long positions in these companies without discomfort, as it has not negatively affected multiples. But the environment warrants attention.

One of the key risk areas lies in the review of tariffs enacted under IEEPA (International Emergency Economic Powers Act). According to The Washington Post, institutional investors are buying rights to legal claims for the payment of these tariffs at $0.20 per dollar. This anticipates a move: if the Supreme Court rules that the charges were illegal, the Treasury could be forced to reimburse up to $130 billion.

Impact of IEEPA: Two Paths to Instability


If the Court overturns the tariffs enacted under IEEPA, the impact on the markets could come through two channels:

Volatility and Regulatory Uncertainty


The removal of the current framework would open a period of uncertainty. Although most of the affected countries have already accepted the new tariffs—which rose from 2.5% in 2023 to nearly 19%, according to the Yale Budget Lab—the Trump administration would resort to other mechanisms such as Section 232. In fact, it has already announced tariffs of 25% on heavy trucks and 30% on upholstered furniture. Restrictions on semiconductors manufactured outside the United States are also under consideration, which would force companies to double their domestic capacity.

Significant Fiscal Loss

The Treasury would lose about $500 million in daily revenue—funds that markets already factor in as partial offsets to the fiscal deficit generated by the OBBA plan. The immediate effect would be a rise in long-term bond yields, which would compress equity valuations in the short term.

Yields, Correlations, and Sensitivities

In this context, the correlation between fixed income and equities is at peak levels. This means that any upward movement in interest rates has greater potential to negatively impact stock prices, especially in an environment of elevated multiples.

The market continues to price in an accommodative Fed: the yield curve projects a terminal rate below 3% by December 2026. This has limited the downside in the 10-year bond yield, currently anchored around 4%.

The key to rate direction lies in labor data. Differences within the FOMC over whether to implement one or two additional cuts before year-end will be resolved—if inflation expectations remain stable—based on employment trends.

Labor Outlook: Mixed Data, Mixed Reactions


The decline in immigration and the slow normalization of the labor market after the pandemic complicate projections. This structural disruption makes it difficult to apply historical models reliably.

The market is particularly sensitive to any data that could disrupt the current balance. Statistics such as those released this Thursday will be key, as they could trigger volatility in the short end of the curve and define its steepening.

A deterioration in the labor market, if interpreted by the Fed as structural rather than cyclical, could prompt more aggressive cuts in the short term. This scenario would benefit tech stocks, which have historically thrived in environments with negative real rates and moderate but sustained growth expectations.

Víctor Matarranz Joins HSBC as Head of International Wealth and Premier Banking for the Americas and Europe

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HSBC has announced the appointment of Víctor Matarranz as Head of International Wealth and Premier Banking (IWPB) for the Americas and Europe, effective October 1, 2025. Matarranz will relocate to London from Madrid and will join the Global Operating Committee of IWPB. The bank has been reorganizing this division, in which Barry O’Byrne was appointed CEO last October, with the aim of strengthening what has become its main profit engine.

Matarranz, who until last year led the Wealth Management and Insurance unit at Santander, will oversee the group’s wealth banking strategy outside Asia. According to the bank’s statement, he will be responsible for expanding HSBC’s wealth management businesses in these regions — including the United States, Mexico, the Channel Islands, and the Isle of Man — and for opening new opportunities in key global corridors. “Víctor’s extensive experience in leading wealth management businesses in these regions will help us refine our focus on serving high-net-worth and UHNWI clients, both in local markets and across global corridors,” said O’Byrne in a statement.

“I’m truly delighted to be joining HSBC as Head of International Wealth & Premier Banking for the Americas and Europe. I look forward to working with Barry O’Byrne and the HSBC International Wealth and Premier Banking leadership team as we leverage HSBC’s unique global strengths and advance our ambition to become the world’s leading international wealth manager. Our focus on connecting clients across global corridors — from the affluent to UHNWI — particularly in the U.S., Mexico, and Europe, is a strategic opportunity I’m excited to help drive,” Matarranz posted on his LinkedIn profile.

For his part, Barry O’Byrne, CEO, International Wealth and Premier Banking at HSBC, stated: “Our connectivity with the Americas and Europe plays an important role in achieving our goal of becoming the world’s leading international wealth manager. We’re thrilled to welcome Víctor, whose broad experience in leading wealth businesses in these regions will help us sharpen our focus on serving affluent and ultra-high-net-worth clients, both domestically and across global corridors.”

Víctor Matarranz joins HSBC from Banco Santander, where he held senior executive roles in Madrid and London over a 13-year period, most recently as Global Head of Wealth Management and Insurance. During his time at Santander, he managed private banking, insurance, and asset management businesses — primarily in the Americas and Europe — and led key strategic projects and M&A initiatives as Group Head of Strategy. He was also a partner at McKinsey & Company, where he spent over a decade advising banks across the Americas and Europe on distribution, digitalization, and new business development.

Pension Funds and RPPS Drive Demand for Franklin Templeton’s “Building Blocks”

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Photo courtesyDaniel Popovich, portfolio manager in the Investment Solutions division at Franklin Templeton

Foundations and public pension regimes have been moving in search of a sophisticated multi-asset allocation, according to Franklin Templeton. In Brazil, the “Building Blocks” product, developed by the firm’s Investment Solutions division, has seen demand, according to Daniel Popovich, portfolio manager in the Investment Solutions area. “Today, the debate is how to invest offshore, no longer whether I should invest. We discuss need, functionality, and benefit: should there be more or less equity exposure? If the interest is solely fixed income, we sometimes challenge that: wouldn’t it make sense to complement it with equities or alternatives to improve the risk/return ratio?” the executive said in an interview with Funds Society.

He explains that, in response to those questions, the solution presented by Franklin Templeton was the development of a sophisticated product that allows allocators easy access to a personalized, multi-asset approach. These are the building blocks. “The idea is to allow the investor to make an international allocation tailored to their risk and return needs, by combining three funds,” he says. In this case, the funds (or “blocks”) are FIFs (funds of funds), each accessing a category of investments: global equities, global fixed income, and international liquid alternatives (equivalent to liquid hedge funds). All of them carry currency exposure.

According to the portfolio manager, the customization occurs through the combination of the three blocks: the fund for each block is the same for everyone, and the investor chooses the weights according to their profile and objectives (e.g., 40/30/30). As Popovich summarizes: “The client can choose the percentage they want to allocate to each of the three funds, and the fund is the same for everyone.” For those who wish to consolidate everything into a single line, the asset manager can structure a “wrapper” FIC that allocates across the three building blocks. Typical liquidity is up to 10 calendar days for redemptions (which may be longer for strategies like credit).

“For example: in the traditional 60-40 portfolio (60% equities, 40% fixed income), it’s possible to allocate 60% to the equity building block and 40% to the fixed income block and immediately access a broad, well-diversified portfolio across regions, styles, asset classes, and managers — all efficiently packaged and aligned with major regulations,” explains the manager, also discussing the cost reduction for allocators.

“This structure reduces the aggregate cost because it combines active funds — where we access cheaper share classes thanks to volume and negotiation power — and ETFs, which are more efficient in terms of fees. The local management fee was designed so that, in aggregate, we are competitive with the market’s feeder funds,” he notes. “We’re bringing the kind of work that was previously done only in a tailored way for large pension funds, now to several smaller foundations and RPPS, with a very similar offering.”

Goal of 500 Million Reais in the Medium Term


Launched last year, the product currently has about 100 million reais ($18.8 million) in assets, with roughly 70% coming from EFPCs and 28% from RPPS (Regime Próprio de Previdência Social). “The goal is to increase that to 500 million reais ($94.3 million) within the next 6 to 9 months,” says Popovich.

To unlock larger volumes, the manager cites “a closing in Brazil’s interest rate curves” as the main trigger. Although the focus is institutional, a small portion of retail investors is also entering the funds, which are currently distributed on the Mirae platform.

CNO Financial Group Enters VPC, Partly Owned by Janus Henderson

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Janus Henderson Group and Victory Park Capital Advisors (VPC), a firm specializing in private credit and majority-owned by Janus Henderson, have announced that CNO Financial Group, a U.S. life and health insurer and financial services provider, will acquire a minority stake in VPC. In addition, CNO will provide a minimum of $600 million in capital commitments to new and existing VPC investment strategies.

Founded in 2007 and headquartered in Chicago, VPC has a track record of nearly two decades providing tailored private credit solutions to both established and emerging companies. The firm was acquired by Janus Henderson in 2024, expanding Janus Henderson’s institutional and private credit capabilities. VPC has specialized in asset-backed private lending since 2010, in consumer credit, small business financing, real estate, litigation finance, and physical assets. Its set of investment capabilities also includes sourcing and managing customized investments for insurance companies. Since its inception, VPC has invested over $11 billion across more than 235 investments.

Headquartered in Carmel, Indiana, CNO offers life and health insurance, annuities, financial services, and workplace benefit solutions through its family of brands, including Bankers Life, Colonial Penn, Optavise, and Washington National. CNO manages 3.2 million policies and $37.3 billion in total assets to help protect its clients’ health, income, and retirement needs.

Transaction Commentary


“We are very pleased to welcome CNO as a strategic partner in our investment in VPC. This collaboration reinforces our shared belief in the long-term potential of asset-backed private credit markets and further deepens Janus Henderson and VPC’s insurance presence. By partnering with like-minded institutions, we continue to enhance our ability to deliver client-led solutions aligned with our strategy to amplify our strengths,” said Ali Dibadj, CEO of Janus Henderson.

“We are excited to partner with CNO to further accelerate VPC’s growth and expand and scale our investment capabilities for the benefit of our clients. CNO’s investment demonstrates VPC’s strong track record of delivering private credit solutions across sectors, our differentiated expertise, and our highly developed sourcing channels, as well as the significant value we bring to our investors and portfolio companies,” said Richard Levy, CEO and founder of Victory Park Capital.

Gary C. Bhojwani, CEO of CNO Financial Group, added: “Our investment alongside Janus Henderson in VPC underscores CNO’s strategic focus on partnering with firms that complement our investment capabilities. This partnership enables us to benefit from VPC’s unique and differentiated expertise in asset-backed credit, both as an investor and a strategic partner, while supporting our ROE objectives. We look forward to working with their highly experienced and respected management teams.”

According to the asset manager, this transaction adds to Janus Henderson’s recent momentum in the insurance space with the previously announced multifaceted strategic partnership with Guardian. Upon completion of this transaction, Janus Henderson Group will remain the majority owner of VPC.

Are Active ETFs Really Active?

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Pixabay CC0 Public Domain2021: A Year of Strong Growth in Net Sales and Assets for the Fund Sector

Active ETFs have rapidly gained ground in portfolios, but their existence is still relatively new, and investors continue to raise questions about them. Nick King, Head of Exchange Traded Funds at Robeco, addresses one of the most common concerns: are active ETFs truly active?

“A common concern about active ETFs is whether their approach is genuinely active or if they are simply restructured versions of passive strategies. Thanks to the evolution in ETF design, the line between active and passive is becoming increasingly blurred. Semi-transparent ETFs, rules-based strategies, or highly customized indices can blur traditional definitions, actually offering more opportunities for investors,” says Nick King.

Do active ETFs inherently carry greater risk simply because they deviate from an index?

“While active ETFs diverge from index-based strategies, this divergence does not automatically translate into greater risk. In fact, they often offer greater diversification and better risk management compared to certain passive strategies, especially when benchmark indices are heavily concentrated in just a few mega-cap stocks,” the expert points out.

King offers an example: indices like the S&P 500 can expose investors disproportionately to the Magnificent Seven. Active ETFs employ comprehensive risk management frameworks and sophisticated analytical tools to mitigate these concentration risks.

Can active ETFs really outperform after fees?

“Active ETFs offer greater transparency regarding costs compared to traditional investment funds, which makes it easier for investors to clearly understand what they are paying for: namely, the intellectual property and strategic insights of the underlying investment approach—not the ETF wrapper itself. In other words, investors are primarily paying for the quality and effectiveness of the investment strategy built into the ETF. As a result, active ETFs provide investors with cost-effective access to sophisticated active management insights,” says the Head of Exchange Traded Funds at Robeco.

Are active ETFs less liquid than passive ones?

The expert notes that “ETFs benefit from two levels of liquidity. First, liquidity comes from the ETF’s underlying investments: stocks, bonds, or other assets it holds. Second, the ETFs themselves are tradable securities on secondary markets. Even when an ETF shows a low daily trading volume, authorized market participants (such as institutional trading desks) continually facilitate liquidity by creating and redeeming ETF shares according to investor demand, allowing them to trade instantly at quoted prices.”

As a result, the liquidity of an ETF is primarily determined by the liquidity of its underlying assets. This mechanism ensures that active ETFs maintain the same liquidity as their underlying investments, regardless of their trading volume on exchanges.

Citi Sells 25% of Banamex to Businessman Chico Pardo

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Foto cedida

The sale of Banamex, Mexico’s oldest bank, by Citigroup continues to unfold in ways that surprise the market. The U.S. banking group has announced the unexpected sale of 25% of Banamex to local businessman Fernando Chico Pardo.

Chico Pardo will acquire the 25% stake through the purchase of 520 million common shares of Banamex, at a fixed price of 0.80 times their book value, as determined under Mexican accounting standards at the closing date.

At the time of signing, this implies a price at tangible book value (common equity capital, as established under the standards, minus impairment and identifiable intangible assets, including internally developed software) of 0.95 times, resulting in a total estimated consideration of 42 billion pesos (around 2.3 billion dollars).

The transaction is subject to customary closing conditions, including regulatory approvals in Mexico, and is expected to be completed in the second half of 2026.

“We are very committed and pleased to be part of Banamex, which is an iconic institution in Mexico with a very promising future. We have great confidence in the team and will continue working closely on the transformation that has already begun, streamlining its end-to-end digitalization with an exceptional focus on customer satisfaction at every point of contact, accelerating even further the growth that has already started,” said Fernando Chico Pardo in a statement.

He also emphasized: “We believe that Banamex’s historical mission is to support the country and its people, and that aligns with our firm conviction that investing in Mexico is the best option due to its potential. Our long-term commitment is to work together to achieve better positioning in all areas and thereby further boost sectors, businesses, and people across the country.”

For his part, Manuel Romo, CEO of Banamex, commented: “At Banamex we are very excited about the relationship beginning between Citi, Fernando Chico Pardo, and Banamex. Fernando combines strategic vision, operational excellence, and a forward-looking project centered on delivering excellence to our clients and based on our talent, as well as a deep commitment to Mexico and great confidence in its growth prospects.”

“Together with Fernando and Citi, we will remain highly focused on our strategy of growth, digital transformation, and expansion, always centered on delivering excellence to our clients,” said the head of the Mexican bank.

Citigroup, meanwhile, stated that the divestiture of Banamex remains a strategic priority and any related decision regarding the timing or structure of the proposed initial public offering will continue to be guided by various factors, including market conditions and obtaining regulatory approvals.

Indeed, the planned IPO process, scheduled for the end of this year, could see some changes with the incorporation of Fernando Chico Pardo into Banamex’s shareholding. Initial reactions from analysts in the sector suggest they expect further clarifications or related news soon.

Chico Pardo: Long Business Career in the Financial Sector

The new Banamex shareholder began his career on Wall Street before founding Acciones y Asesoría Bursátil, a brokerage firm where he was founding partner and CEO until 1992.

That year, the brokerage firm merged with Inbursa, and Fernando Chico Pardo assumed the role of CEO of Grupo Financiero Inbursa until 1997. In 1997, he founded Promecap, a leading private equity firm in Mexico managing assets worth 5 billion dollars, where he serves as chairman and CEO.

He is also a controlling shareholder in ASUR (airports), RLH Properties, and Tortuga (hospitality), and is the largest individual shareholder of Carrix (port operations). He also serves as chairman of the board at ASUR and sits on the board of directors of Carrix and various Mexican companies such as Grupo Carso, Grupo Industrial Saltillo, and GEPP.

Historic Endorsement From Trump and Bessent for Milei’s Argentina

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The government of Donald Trump continues to break the mold, carrying out unprecedented actions. The United States Secretary of the Treasury, Scott Bessent, reported this Wednesday, September 24, that he is negotiating a $20 billion swap line with the Central Bank of the Argentine Republic (BCRA). He also said that the U.S. administration is prepared to grant a “significant” stand-by loan through the Exchange Stabilization Fund and is willing to purchase Argentina’s dollar-denominated bonds, both on the primary and secondary markets. He clarified that this would be done “when conditions justify it.”

The official confirmation came one day after the meeting in New York between Donald Trump and the Argentine president, libertarian Javier Milei, in which Trump himself heaped praise on the Argentine leader. He later reiterated his stance on X, and Bessent commented on the post, adding: “We are willing to do whatever it takes to support Argentina and the Argentine people.”

Additionally, the Treasury Secretary stated that he has “contacted numerous U.S. companies that intend to make significant foreign direct investments in multiple sectors in Argentina if the election outcome is positive.” The official clarified that “immediately after the elections, we will begin working with the Argentine government on the repayment of its main debts.” He later emphasized to reporters that “the United States will not impose any new conditions or requirements” on Argentina.

At the same time, it was also announced the previous day that the World Bank and the Inter-American Development Bank (IDB) will accelerate their monetary assistance to the country, with a combined amount reaching $7.9 billion, with the goal of helping Javier Milei’s government navigate the crisis.

Key Elections

The explicit support and financial aid from the United States come two weeks after the defeat of Javier Milei’s party in the elections in the Province of Buenos Aires, which accounts for nearly 40% of the country’s electorate. No pollster came close to predicting the outcome, and the opposition had a 13-point lead over the ruling party. On Sunday, October 26, legislative elections will be held at the national level in Argentina. President Milei needs to expand his parliamentary representation in order to pass structural reforms, after having stabilized the macroeconomy and fiscal front.

The day after the defeat in Buenos Aires, Argentine assets collapsed, reviving the specter of the 2019 PASO (mandatory primary) elections, when the market plunged 50% following the large advantage the PJ had over former president Mauricio Macri.

On September 8, Argentine dollar bonds led losses among emerging markets, the Merval index dropped nearly 13%, and the Argentine peso lost 4% against the dollar. In the following days, the negative trend persisted: on Friday the 19th, the Central Bank intervened in the foreign exchange market with the largest daily dollar sale in six years ($678 million) to support the peso. Economy Minister Luis Caputo reiterated after the electoral defeat that the dollar would remain contained within the exchange rate band established on Monday, April 14, when Argentina unexpectedly lifted currency controls. Since that date, the South American country has implemented a new managed float regime, with a band ranging from 1,000 to 1,400 pesos per dollar, increasing monthly by 1%. The BCRA intervenes in the market if the bands are breached.

Much of the financial negativity stemmed from the government facing debt maturities of $12 billion in 2026, and the market closely monitoring the Central Bank’s reserves. After this week’s strong U.S. backing, optimism took hold in the market: dollar bonds rose as much as 12%, and the EMBI+ Argentina index — a benchmark for country risk prepared by JP Morgan — showed a drop of nearly 400 points, hitting an intraday low of 839 points and closing at around 900. Last Friday, this index reached a peak of 1,516 basis points, when the dollar touched the upper limit of the band, forcing the BCRA to intervene in the market.

Analysts’ Views

“The government seems to have managed to reverse a scenario where expectations had become unanchored,” said Eric Ritondale, chief economist at PUENTE, after the details of the U.S. economic support were revealed. In his view, the market’s reaction before and after the announcement indicates that the recent weeks’ volatility “was more about expectations than about fundamental elements of the economy.”

“After the elections, we expect the economic team to seek to rebuild reserves, advance a currency adjustment, and lower rates to reactivate the economy. If consolidated, that combination could lay the groundwork for a recovery,” he added.

Grupo IEB published a special report titled “Shift in Expectations”, in which it stated that “this trend change in expectations eases the exchange and monetary outlook, allowing for potential currency purchases by the Treasury, a possible rate cut via reserve requirement reductions and/or a decrease in the rate on remunerated liabilities.”

The report highlighted a central point, especially looking ahead to the upcoming elections. It is necessary that “the impact on the real economy be felt as quickly as possible. FX control and rate cuts will be a good starting point.” To curb inflation, the government implemented an unprecedented fiscal adjustment.

For its part, Delphos Investments reiterated on Wednesday its recommendation of caution to its investors until it is confirmed that the bottom for Argentine stocks has been reached. “The market reacts disproportionately to both positive and negative news, and while the weekend was dominated by favorable economic signals, the political catalysts — perhaps the most necessary — remain scarce and unpredictable.” The Research Department of Capital Markets Argentina wrote in a report that it expects high volatility in the Argentine market in the short term.

Reasons to Invest in Water Infrastructure Through ETFs

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Pixabay CC0 Public Domain

The challenge of water and sanitation has been one of the United Nations Sustainable Development Goals since 2016. And within this niche, there are investment opportunities—also through ETFs. Water is a vital element, not only for sustaining life, but also for the development of new technologies and industries. In First Trust’s opinion, water infrastructure represents “an attractive investment opportunity,” driven by new catalysts and emerging trends such as water-intensive manufacturing, the shift to liquid cooling for AI data centers, and hydraulic fracturing in the energy sector.

The firm explains that the reindustrialization of the U.S. economy will lead to a drastic increase in water demand in the coming years, especially in sectors that are major water consumers, such as semiconductor manufacturing. As these and other projects expand, First Trust forecasts that “substantial investments” will be needed in water infrastructure.

In addition, advances in generative AI have captured global attention. To meet the growing performance demands of AI, global data center capacity is expected to grow by 52% between 2024 and 2027. In this context, keeping high-performance processors cool presents a significant challenge for traditional air-cooling systems, which has led the sector to adopt liquid cooling. Here, the firm cites JLL estimates, indicating that hybrid cooling—70% liquid and 30% air—“has become the standard thermal management strategy for new data centers.”

Hydraulic fracturing (“fracking”) also continues to be a key driver of demand for water infrastructure, according to First Trust. Fracking involves injecting high-pressure water, sand, and chemicals into underground rock formations to extract oil and gas. A single fractured well can consume between 1.5 and 16 million gallons of water.

Moreover, fracking produces “flowback water,” a toxic byproduct that requires treatment using technologies such as microfiltration and reverse osmosis. “From sourcing water to its treatment, transport, and control, fracking processes—which consume vast amounts of water—generate considerable demand for water resources,” the firm notes.

In light of these emerging trends, investing in U.S. water infrastructure becomes increasingly important. The 2025 report by the American Society of Civil Engineers (ASCE) on the state of U.S. infrastructure gave poor marks to water systems, including a low pass for drinking water, a solid pass for wastewater, and a failing grade for stormwater systems.

This reflects decades of underinvestment, as data from the Congressional Budget Office shows that spending on water infrastructure has grown only 0.3% over the past 20 years. The ASCE estimates that $1.65 trillion will be needed between 2024 and 2033 for drinking water, wastewater, and stormwater infrastructure. With only $655 billion funded, “the remaining $1 trillion funding gap is the largest of any infrastructure sector.”

Investors can benefit from these macro trends by including ETFs that focus on water-related industries in their portfolios. One such option is the First Trust Water ETF, listed on the NYSE. It tracks the ISE Clean Edge Water Index, composed of 36 stocks focused on the drinking water and wastewater sectors, including water distribution, infrastructure development, purification and filtration, as well as related services like consulting, construction, and metering.

Another option is BlackRock’s iShares Global Water UCITS ETF U.S. Dollar (Distributing), which tracks the S&P Global Water Index. This year, its valuation has increased by just over 15%, through investments in companies involved in the global water sector, across both developed and emerging markets. As a complement, Amundi offers the Amundi MSCI Water UCITS ETF Dist, which aims to replicate the performance of the MSCI ACWI IMI Water Filtered Index.

A further option is the Invesco Water Resources ETF, based on the Nasdaq OMX Global Water Index, which seeks to replicate the performance of companies listed on global exchanges that produce products designed to conserve and purify water for homes, businesses, and industries. This ETF is listed on the Nasdaq.