What Would Adopting a Wealth Tax in the U.S. Entail?

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As the April tax filing deadline approaches, millions of Americans are preparing their returns and anticipating possible refunds. According to experts, this federal tax refund represents a significant financial boost. Notably, Florida, Texas, Wyoming, Nevada, and Louisiana are the five states with the highest average refunds, as identified by a report from Upgraded Points, based on data from the Internal Revenue Service (IRS).

In addition to differences by state, tax refunds vary significantly depending on income level. As the report notes, higher-income households receive larger refunds on average, but a smaller proportion of them receive one. For example, IRS data show that among taxpayers earning over $200,000, the average refund rose to $17,668. “However, only 35% of returns received a refund, and nearly a third of taxpayers with overpayments chose to apply it to the following year’s taxes,” the report adds.

Wealth tax: a theoretical exercise

However, advisors acknowledge that for HNWI and UHNWI profiles, tax filing is somewhat different, as they manage complex tax structures that must be considered in their financial planning and investments. Given that the U.S. does not have a wealth tax—that is, a tax on the value of assets net of liabilities—tax filing becomes a key moment. But what would be the implications of implementing one?

According to an analysis conducted by the Urban Institute & Brookings Institution, if all assets above $50 million ($25 million for unmarried taxpayers) were subject to a 1% tax, it would raise close to $2 trillion over a 10-year period, with approximately 86% of the burden falling on families in the top 1% of earners.

Additionally, the analysis indicates that increasing the tax rate to 2% for assets above $100 million ($50 million for unmarried taxpayers) or lowering the threshold to $30 million ($15 million) would increase the estimated revenue by approximately an additional $1 trillion. “Revenue estimates decrease by around 45% if the tax base excludes pension benefits, the value of housing above $1 million, and businesses in which the owner actively participates,” they note.

Political dimension

This is a theoretical exercise because, as seen this year, the Trump Administration has no intention of taxing high-net-worth individuals; in fact, its policy moves in the opposite direction: reducing taxes and the fiscal burden on large fortunes. By contrast, looking back, during the 2020 presidential campaign, several candidates proposed broad wealth taxes aimed at the wealthiest households.

“The goals of those proposals were primarily to address wealth inequality and to fund the expansion and creation of new spending programs and tax credits. Although Biden proposed other approaches to achieve those goals and it is unlikely that the Trump administration will raise taxes on the very wealthy, advocates of wealth taxes have continued to push for their adoption: Zucman has proposed a global wealth tax, while legislation has been considered in several states. In the future, interest in wealth taxes could resurface if federal debt and wealth inequality continue to rise,” explain the authors of the cited report.

The document suggests that when policymakers debate these proposals, they should consider four key factors: the tax base and how it may affect individuals’ investment decisions and their ability to avoid the tax; asset valuation and how easily taxpayers could avoid or evade the tax by undervaluing their assets; the threshold and rate of the wealth tax, as well as its interaction with the treatment of personal income tax applied to capital income; and the tax unit and opportunities for individuals to minimize their tax burden by transferring assets to family members.

J.P. Morgan Welcomes a New Banker and Managing Director

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Photo courtesy

The private bank of J.P. Morgan has a new executive among its ranks, who was recently hired as a banker and Managing Director. This is Pablo Artigas, a professional with more than 19 years of experience in the financial industry, holding a variety of roles between Santiago and New York.

According to the firm’s Managing Director, José María Fornasari, in a post on his professional LinkedIn network, Artigas joins the Latin America team in the Miami office of the U.S. investment bank, where he will serve ultra-high-net-worth clients.

The professional in question had already announced a week ago his departure from Santander Chile, where he held various roles, accumulating experience in global markets, derivatives, and corporate banking. “I move forward with full motivation, energy, and focus on learning, building, and contributing from day one,” he stated at the time.

Before moving to J.P. Morgan, Artigas served as Managing Director and Head of the Specialized Industries & Corporates area at the Spanish-headquartered firm. During his time at the Chilean bank, he also worked as Executive Director of Banking & Corporate Finance and Head of the Financial Institutions Group.

The executive’s career also includes a previous stint at J.P. Morgan, where he worked between 2006 and 2013 in the derivatives sales area for institutional clients in Chile, Peru, and Central America. In addition, he worked at Société Générale, in Cross Asset Solutions, selling to clients in Mexico, Chile, Peru, and Colombia.

J.P. Morgan’s private bank advises $2.7 trillion (millions of millions) in client assets, with 3,500 advisors working across more than 75 offices globally.

Infrastructure, ‘Oshikatsu,’ and Defense: Three Themes for Continuing to Invest in Japan

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temáticas para invertir en Japón
Photo courtesySimon Morton-Grant, Client Portfolio Manager of the CT (Lux) Japan Equities Fund at Columbia Threadneedle Investments

Japan has shifted from behaving like an equity market where investors focused on companies with low margins and high capex to one centered on efficiency and return on capital, where governance has become the cornerstone of this transformation. “The underlying story in Japan is extremely attractive,” says Simon Morton-Grant, Client Portfolio Manager of the CT (Lux) Japan Equities fund at Columbia Threadneedle Investments.

The expert, who recently visited Spain, highlighted the multiple growth catalysts his firm currently sees in this market: first, efforts to continue increasing shareholder returns (ROE) remain in place, with a new record for share buybacks in 2025; second, the country is once again posting positive growth, and after deep reforms in recent years, the TOPIX index has become a reflection of that growth; third, Japanese household savings amount to around $14 trillion, and half of that money is held in cash, leading the firm to expect—in a context of rising inflation—that part of those savings will flow into equity markets to avoid loss of purchasing power; fourth, the expert highlights the willingness of the new government to continue deep political and economic reforms to further stimulate national growth. For these reasons, the expert is clear: “Any point of weakness from here on could be a good entry point to invest in Japan’s long-term structural growth story.”

Is the rise in geopolitical risk due to the Iran conflict affecting the Japanese stock market in any way?

We want to make it clear to our clients that disruptions around the Strait of Hormuz have the potential to impact the global economy. Japan imports more than 90% of its crude oil from the Middle East, although it makes virtually no direct imports from Iran. We believe that, for now, this situation remains contained in Japan’s case, as it has several measures to mitigate these effects. First, it has oil reserves equivalent to 245 days—one of the highest coverages among developed economies, roughly eight months—which provides a short-term buffer. Second, Japanese authorities have estimated that oil prices would need to reach and remain at $175 per barrel for a prolonged period for Japan to enter a recession; currently, we are far from that level. Even if it were reached, it would need to be sustained for some time.

This is therefore a risk that must be monitored. However, the team has just returned from Japan and, in meetings with companies—at a time when this situation was already beginning to unfold—firms believed they could pass on increased costs to consumers without materially affecting margins. It is an evolving conflict and should be closely watched for changes, but at current levels we do not see a cause for excessive concern.

Can movements in the Japanese yen significantly impact Japanese companies, especially exporters?

It should be noted that we are not macroeconomic specialists. That said, we believe that if the yen were to exceed 160 against the dollar, the government or the Bank of Japan could intervene. Within the 140–160 range, the environment remains relatively comfortable for Japanese equities. Moreover, the historical correlation between a rising Japanese stock market and a weakening yen has diminished in recent years. Japan is no longer necessarily a bet on a weak yen. The economy now has more growth drivers: domestic companies are contributing to earnings growth and, therefore, to index performance, something that was not the case 10–15 years ago, when exporters were the main engine. In the portfolio, we have a natural hedging mechanism: a weak yen benefits exporters, while a strong yen favors domestic businesses.

Sanae Takaichi plans to deepen Abenomics. How could this affect your asset class?

We do not usually pay much attention to changes in prime minister, but in this case it is relevant. She is a potentially transformative figure who breaks with the traditional profile of Japanese political leadership and maintains a strong pro-growth focus. She is an heir to Shinzo Abe’s legacy: expansionary fiscal policy, accommodative monetary policy, and significant fiscal stimulus. We believe her economic and reform agenda could boost the market and open a new phase of growth in Japan. In addition, the new governing coalition has a clear pro-growth bias and supports decentralization, shifting part of the economic weight from Tokyo to other regions such as Osaka. This could increase the value of land and assets in those regions and foster greater economic dynamism.

Another key element is her industrial policy and the associated investment opportunities. Takaichi prioritizes increased spending on artificial intelligence, semiconductors, nuclear reactivation, defense, and economic security. These areas form a new universe of opportunities under the current administration. She has also managed to unify the party, attract younger support, and consolidate a stable political base—crucial for implementing meaningful reforms.

Where do valuations currently stand?

Compared to historical averages, valuations have increased slightly over the past year. However, the higher multiples often highlighted in the media are heavily influenced by large-cap and more expensive stocks. Looking at the TOPIX index, around 35% trades below book value, indicating that many attractive opportunities still exist. In relative terms, while U.S. valuations are above their historical average, Japan remains cheaper, especially in a context of rotation away from U.S. exceptionalism.

Where are you finding opportunities?

Historically, Japan has been associated with automation, a highly sought-after sector. However, following a recent visit, the team has identified new areas of interest. First, infrastructure renewal. Two growth drivers coexist: on one hand, more visible sectors such as artificial intelligence or electric vehicles, with strong demand but higher cyclical sensitivity; on the other, the replacement of infrastructure built during the late-1980s bubble. The latter represents structural, stable, long-term demand, especially in construction.

Second, the so-called “oshikatsu” economy, or fandom economy, where consumers follow athletes, actors, or content creators. This phenomenon, particularly relevant among Generation Z, creates opportunities in merchandising and digital platforms. Third, economic security and defense. The new government is adopting a firmer foreign policy stance, and increased defense spending as a share of GDP opens opportunities in shipbuilding, cybersecurity, and other segments.

Of course, we remain exposed to companies linked to robotics, a structural trend in Japan, which accounts for approximately 50% of the global industry.

What risks are you monitoring?

One of the main focuses is public debt. Although the debt-to-GDP ratio is around 200%, 90% of the bonds are held domestically, which provides stability. In addition, high tax pressure and a near-zero deficit reinforce sustainability. By comparison, the U.S. or China have deficits of around -6%. The second risk is geopolitical, particularly in the relationship between Japan and China. While tensions exist, we do not anticipate structural deterioration, given the significant global impact it would have. Finally, the Middle East remains the main short-term risk. Oil price developments will be key, as they could trigger inflationary or energy tensions in Japan.

Do you expect a rebound in inflation in Japan?

It is possible in the current context, but levels remain manageable. The Bank of Japan postponed a rate hike initially expected in March, likely to April or May. Even if rates reach 1% or 1.25%, monetary policy would remain accommodative. We believe the Bank of Japan is in a normalization process, not a tightening cycle. At current inflation levels, companies can pass costs on to consumers without significant impact. This reflects a structural shift in Japan toward a virtuous cycle of wage growth and inflation, which could be positive for the economy, economic policy, and markets.

The New Wave of ETFs Points to the Formation of Small Bubbles

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scale in hedge funds
Pixabay CC0 Public Domain

Exchange-traded funds have transformed the world of investing. The number of ETF launches reached a record in 2025, with more than 1,000 new funds coming to market. However, recent launches have become “more specialized, less diversified, and more expensive,” according to a Morningstar analysis.

According to the firm, the growing number of these specialized ETFs has revealed a “concerning” trend: rather than solving real problems, many are simply riding dominant trends.

This often happens after the underlying stocks have already delivered strong short-term returns, according to Morningstar, which adds that “the irony is that these ETFs tend to come to market at, or near, the peak of a narrative, when valuations are inflated and return expectations are less optimistic.”

The result is that investors end up holding speculative portfolios with high fees. These ETFs “amplify the hype around underlying themes and can contribute to the formation of small bubbles.”

Historically, similar ETF launches have clustered in periods when specific themes performed well, often accompanied by narratives about how those themes would “change the future.” One example is ESG-focused ETFs, which went through this phase in 2021. ETFs linked to artificial intelligence and cryptocurrencies have taken center stage since 2025.

Rather than being grounded in solid investment principles, most of these launches have been timed to capitalize on the enthusiasm surrounding a particular theme.

The Performance Problem

Because many thematic ETFs are launched near market highs, they often face a difficult path from day one. Years of analysis across multiple market cycles show that thematic ETFs tend to lag the broader global equity market after launch, largely because “they are expensive and their valuations at inception are already inflated,” the firm notes.

Morningstar observes this pattern in several recent periods. In 2021, 38 new ESG-focused ETFs were launched following a strong 2020. As of February 2026, only 21 of those 38 vehicles remain. “This high closure rate could be attributed to inconsistent or disappointing performance, an inability to attract new investors, or both factors.”

In 2025, 70 new ETFs focused on digital assets and cryptocurrencies were launched. Some simply track the price of cryptocurrencies such as bitcoin, solana, XRP, ethereum, or dogecoin. Others take already “inherently volatile” cryptocurrencies and add leverage or options that alter their risk/return profile.

The firm notes that these launches followed a couple of exceptional years for cryptocurrencies: bitcoin surged 150% in 2023 and 125% in 2024. However, “investors in more recently launched ETFs in this theme were unable to replicate those spectacular returns,” as bitcoin reached its peak in October 2025 and has since fallen by nearly 50%.

Meanwhile, diversified benchmark indices continued to post steady gains. “In the long term, the combination of poor timing, volatility, high fees, and lack of diversification tends to result in underperformance compared to ETFs that track the broader market,” the firm states.

Concentration and Limited Diversification

Although thematic ETFs may appear diversified at first glance, they are often far more concentrated than investors realize. Most of these vehicles include only a handful of stocks, compared with broad market indices that contain between 500 and more than 5,000 securities, according to Morningstar.

Of the 1,117 ETFs launched in 2025, only 182 had more than 100 holdings in their portfolios. This means that approximately 84% of newly launched ETFs are considerably more concentrated than many investors believe. In addition, nearly 46% of the 1,117 ETFs launched in 2025 held fewer than 10 securities.

“Concentrated portfolios magnify the impact of stock-specific risk and make fund performance disproportionately dependent on a small group of volatile stocks,” the firm notes. It also points out that thematic ETFs with many holdings “may have achieved that diversification by including stocks that have little connection to the concept being marketed to investors.” As a result, the concept can become too diluted, and the ETF may not actually provide the exposure it claims.

Higher Fees and “Mini-Bubbles”

Fees have also started to move in the “wrong direction”: ETFs launched in 2025 had, on average, higher expense ratios than more established funds. Moreover, the firm finds no evidence that these higher costs translate into benefits for end investors.

The rise in expense ratios is largely due to the growth of actively managed ETFs. Of the 1,117 ETFs launched in 2025, 943 do not track any index and would be considered actively managed. The equal-weighted average expense ratio for this group stood at 76 basis points. The common denominator among these recent launches appears to be “high fees, limited diversification, and unjustified complexity.”

When the enthusiasm surrounding these products fades, the correction can be swift and severe. Valuations begin to normalize, triggering sharp declines in the underlying stocks. ETFs focused on small, speculative securities can exacerbate these price drops as fear and selling pressure increase. This often coincides with a wave of ETF closures, as funds that once attracted investors during the boom struggle to remain economically viable once performance weakens.

Ultimately, many investors are left with losses that could have been avoided had they focused on sound principles rather than chasing returns. Ironically, trying to get rich quickly is often the slowest way to build wealth.

What Investors Should Do

Narrative-driven cycles are nothing new, according to Morningstar, as markets have experienced them before and continued to thrive. The keys to long-term success have not changed: diversification remains the first line of defense, helping to reduce stock-specific risks inherent in narrow themes.

Fees also deserve close attention: higher expense ratios require stronger performance to justify the cost. Thematic ETFs have a weak track record, and most fail to outperform the global market.

It is advisable to maintain a healthy degree of skepticism when certain themes dominate headlines: trends that capture media attention and then become the target of a new ETF often signal that the narrative has already been fully priced into the market.

In conclusion, the firm notes that the growing variety of ETFs demands greater scrutiny than ever from investors. “They must look beyond the ‘ETF’ label and evaluate what they are actually buying.”

They also recommend considering the number of holdings in the portfolio, the economic fundamentals behind the narrative, the fees relative to alternatives, and whether recent performance reflects solid fundamentals or temporary enthusiasm. “The idea is to avoid the pitfalls of narrative-driven ETFs and focus on strategies with a solid foundation,” as “ETFs remain powerful tools when used with the same care and discipline that defined their initial success.”

Therefore, in a market environment where innovation is abundant and enthusiasm spreads quickly, “thoughtful decision-making remains the most reliable safeguard.”

The Great Scale in Hedge Funds: A Blessing for Some, a Problem for Others

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Ignacio Villanueva en Singular Bank
Pixabay CC0 Public Domain

Without much incentive to communicate their strategies and internal developments, it is difficult to obtain complete information on hedge fund performance. However, a detailed analysis by alternative investment services firm Canoe Intelligence, backed by Goldman Sachs in its latest funding round, points to the differences that arise within the hedge fund space.

The dilemma, according to the entity in a report, is that performance benchmarks for the segment do not provide the full picture, as they tend not to include the vehicles that actually dominate institutional allocations. As a result, the firm decided to analyze hedge fund performance using aggregated data drawn directly from account statements, investor letters, and fund reports from more than 500 institutional investors and over 18,000 limited partners.

From this exercise, some trends emerge when looking at the most relevant hedge funds, which Canoe classifies as “VIP.” Within this segment, the firm observed trends related to different strategies and how size appears to work for or against various structures.

Specifically, multi-manager hedge funds seem to benefit from greater size, while relative value and arbitrage vehicles are a more fertile ground for smaller firms.

Pod Shops: The Advantage of Scale

Breaking down the different categories, the report highlights that there is one type of hedge fund that proves more effective at capital preservation: multi-manager hedge funds.

These platforms, known as “pod shops”—as they consist of different teams, each with their own investment philosophies, actively managing their allocated portions of the portfolio—have demonstrated the ability to navigate market volatility with limited drawdowns and rapid recoveries.

The most relevant multi-manager hedge funds within institutional portfolios, the VIPs, the report notes, “showed the smallest drawdowns of any segment analyzed, including VIP quantitative and arbitrage strategies.”

For example, during the market turmoil of October 2023, VIP pod shops recorded virtually no losses, according to the firm’s estimates, while the broader VIP hedge fund segment experienced a 3% contraction. This occurred while the adjusted S&P 500 fell by 5% over the same period. Similarly, in April 2025, multi-manager vehicles posted declines of 0.5%, compared to 2.7% for VIP hedge funds and 4.5% for the U.S. equity market.

What explains this behavior? According to Canoe, as highlighted in its report, size works in favor of these hedge funds. “Large multi-manager platforms have built risk mitigation strategies to absorb market dislocations—across sectors and strategies—without a material impact on the portfolio,” they noted.

Since each portion of the multi-manager vehicle—each “pod”—has a different risk/return profile and relationship with the broader market, gains and losses across the platform can offset one another.

Relative Value and Arbitrage: The Reward for Agility

While there are many contexts in which size benefits investment funds, in the case of hedge funds, relative value and arbitrage strategies were identified as areas where it is better not to grow too large.

In this segment of the market, agility is what is rewarded, according to Canoe’s data. On an absolute basis, looking at the past three years, relative value hedge funds overall have delivered an 8% annual return with 2.6% annualized volatility, while the VIP segment—comprising larger hedge funds—within relative value and arbitrage strategies posted a 6% return with 1.4% volatility.

This means that smaller vehicles achieved better performance, accepting greater turbulence in the process.

In this case, larger size is no longer a comparative advantage, as it is with pod shops. “Relative value and arbitrage strategies are fundamentally about speed and agility,” Canoe explains, as they focus on exploiting pricing inefficiencies that may disappear within hours or days.

“At scale, the ability to execute quickly enough to capture those opportunities becomes structurally more difficult,” they explained in the report. For example, larger positions may impact the market, or decision-making agility may be reduced due to more complex approval chains.

The Hedge Fund Benchmark Dilemma

The financial services firm’s study aims to capture dynamics that traditional hedge fund benchmarks fail to reflect, given how they are constructed.

Most, they noted, are based on information voluntarily provided by managers. As a result, there is a bias toward firms that are actively raising capital, while larger and more successful firms, those with little marketing incentive to report and many reasons to keep their performance private, are underrepresented.

“The result is an index shaped more by who participates than by where institutional capital actually resides. This is a contribution bias and has skewed published benchmarks toward smaller managers that are in capital-raising mode,” they stated in the report.

This leaves out large segments of the hedge fund industry from standard metrics, such as multi-manager platforms, quantitative investing giants, and “global macro legends”—investment firms managing hundreds of billions of dollars in assets.

AQR Capital Management Hires Samantha Muratori to Lead US Offshore

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Samantha Muratori at AQR
LinkedIn / Samantha Muratori (AQR Capital Management).

Samantha Muratori joins the AQR Capital Management team. Following her time at Voya IM, where she held the position of Vice President, Senior Regional Director – US Offshore since 2023, Muratori joins AQR to lead the US offshore market. She will be based in New York and will report to Jorge Fernández-Cuervo, Executive Director of AQR Capital Management.

Muratori has extensive experience in the US offshore market. In addition to Voya IM, she has developed her professional career at firms such as AllianzGI, where she held the position of Vice President, Business Developer, NRB, and AXA IM, as a US Offshore Sales Associate. In terms of her academic background, she holds a B.A. in Political Science and Anthropology from Union College.

BlackRock Appoints Alberto Fuentes as Head of Private Markets Business Development Team for LatAm

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Alberto Fuentes at BlackRock LatAm
LinkedIn / Alberto Fuentes, New Head of Private Markets Business Development Team at BlackRock for LatAm

Changes in BlackRock’s private markets area in LatAm. The firm has promoted Alberto Fuentes as the new Head of Private Markets Business Development Team. Until now, Fuentes held the position of Director of Alternatives for LatAm, thus assuming new responsibilities focused on developing the firm’s business in this region.

“I am pleased to share that I have taken on a new role at BlackRock as Head of Private Markets Business Development for LatAm. After leading capital raising campaigns for BlackRock in Mexico for 8 years, and more recently supporting Chile in collaboration with our sales teams, I have expanded my responsibilities to support the region as a whole. It will be an honor to continue collaborating with our GIP and HPS teams, supporting their capital raising priorities across the region,” Fuentes stated on his LinkedIn profile.

Fuentes joined BlackRock in 2018 as Associate Institutional Sales in Mexico. Since then, he has developed his professional career at the firm, holding different positions of responsibility, including Vice President – Alternative Specialists and, more recently, Director of Alternatives for LatAm. Before joining BlackRock, he began his career at the firm Pensionissste, where he was a member of the Asset Allocation team. Fuentes holds a degree in Finance from Montana State University-Bozeman and a master’s degree in Banking and Finance from Stockholm University.

Latin American Currencies: Has the “Pax Cambiaria” Ended Amid the Global Context?

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Photo courtesyRay Jian, Director of Emerging Market Fixed Income at Amundi

Fifty years ago, Latin American currencies fell into a spiral of collapses that led them to experience the darkest period in their modern history; today, the outlook is different, as the region is perhaps experiencing a standout moment in terms of stability: the “currency pax.” However, storm clouds on the horizon have unsettled their performance amid the global context.

So far in the 21st century, Latin American currencies have followed a clear path: structural depreciation against the dollar, but with very different degrees of stability. Mexico and Chile have managed to preserve relative value over time, Brazil has alternated between cycles of strength and weakness, while Argentina represents an extreme case of monetary destruction. But overall, nothing comparable to the abrupt, widespread devaluations of the last quarter of the 20th century, nor to the experiments with various exchange rate regimes.

According to Deutsche Bank’s currency strategy, the performance of the region’s most important currencies so far this century is as follows: the Mexican peso maintains moderate structural depreciation of between 70% and 90%, nothing comparable to the more than 1,000% seen in the last quarter of the previous century. It has gone through periods of high volatility this century, but without collapse; in fact, it is one of the most stable currencies in emerging markets.

The Brazilian real, meanwhile, has accumulated depreciation of between 170% and 220% this century, also with strong periods of volatility, but still remains attractive due to high interest rates (carry trade). The Chilean peso has depreciated between 60% and 80% during the century, but is also one of the most stable currencies in the region. The Argentine peso is another story, with multiple currency changes and controls; it is an extreme case of chronic inflation, successive devaluations, and total loss of real value. It is one of the worst-performing currencies globally this century.

Given the current global turbulence, will Latin America be able to maintain this stability, or is there a risk of a new period of extreme volatility and pressure on the region’s exchange rates?

Funds Society spoke with Pedro Quintanilla-Dieck, Senior Emerging Markets Strategist at UBS Global Wealth Management (GWM), one of the Swiss bank’s main divisions, about his outlook for the near future regarding the region’s most representative currencies.

Short-Term Weakness, the Hallmark for Latin American Currencies

In general, current analyses point to greater weakness in the region’s most representative currencies given the global context, but so far there are no signs of the kind of exchange rate collapses seen in the last quarter of the previous century.

UBS GWM shares this view: “In our opinion, Latin American currencies have greater protection against global volatility thanks to structural fundamentals. The region stands out for stronger macroeconomic and fiscal frameworks and is relatively insulated from geopolitically conflictive areas. In addition, Latin America produces commodities that are increasingly in demand, such as copper in the energy transition and agricultural products in a context of vulnerable supply chains. In this environment, the Brazilian real stands out for its resilience, supported by high interest rates and strong external accounts thanks to agricultural and energy production,” notes Pedro Quintanilla.

According to the expert, this strength is the result of decades of fiscal discipline in many countries in the region, as well as control of factors such as inflation, and more broadly, structural adjustments that contributed to the exchange rate stability the region is experiencing today.

Below is the analysis provided by the UBS GWM expert on the region’s main currencies and, above all, the institution’s medium-term expectations for each of them.

Chilean Peso: Impacted by the War, but Resilient in the Medium Term

In net terms, the Chilean peso has depreciated slightly against the dollar. Until the end of February, factors such as attractive valuations, high copper prices, and a generally weak dollar supported the Chilean peso. However, since the start of the conflict with Iran at the end of February, the peso has become one of the most depreciated emerging market currencies, due to the sharp increase in oil prices, which negatively affects the country’s terms of trade, given that Chile imports 100% of the oil it consumes.

As the conflict eases and oil prices normalize, the Chilean peso is likely to resume its appreciation trend. In addition, there are idiosyncratic factors that could support the currency, such as accelerated growth driven by the pro-business agenda of Kast’s new government, which includes tax cuts and deregulation. The Chilean peso is currently trading at 915 per dollar, but in this context we expect it could close the year around 870 per dollar, approaching levels seen before the conflict.

Argentine Peso: Structural Reforms Will Continue to Support It

In our view, the accumulation of international reserves and progress in structural reforms continue to reduce country risk and support the transition toward a more flexible exchange rate regime. The central bank has purchased nearly $4 billion so far this year and is expected to exceed $10 billion in 2026. In addition, rising oil prices benefit the peso, as Argentina is a net exporter. We expect the exchange rate to close the year at 1,700 pesos per dollar.

Brazilian Real: The Strongest Currency in the Region

The Brazilian real is the emerging market currency with the greatest appreciation so far this year, advancing 6% against the dollar. This performance has been driven by high commodity prices, historically high interest rates, and a gradual rate-cutting policy. In addition, as a net oil exporter, Brazil has been shielded from depreciation pressures during the Middle East conflict, benefiting from stronger terms of trade and higher fiscal revenues.

We believe these factors will continue to support the real in the short term. As the conflict subsides, Brazil will lose the additional boost from oil but could benefit from a better global environment and a generalized weakening of the dollar. Ahead of the October elections, the real could face slight depreciation. It is currently trading at 5.1 per dollar; we estimate it could approach 5 in the coming months, although it will likely close the year around 5.5 per dollar.

Mexican Peso: USMCA Developments Will Bring Volatility

Our projections point to a gradual appreciation of the peso going forward, with levels of 17.7 by the end of the second quarter of 2026, 17.5 in the third quarter, and 17.2 by year-end and in the first quarter of 2027.

This scenario assumes a moderation of global tensions and greater stability in financial markets. However, we anticipate a non-linear path, with episodes of volatility linked to both external and domestic factors, particularly around the USMCA and monetary policy decisions in Mexico and the United States.

Thus, while most analyses point to weakness in regional currencies in the coming months due to various geopolitical and internal factors—or a combination of both—there currently appears to be no risk of a collapse of the “currency pax” that has characterized this part of the world so far this century, unlike what occurred in the final three decades of the 20th century.

Sophie del Campo (Natixis IM): “We Are in a Quite Sweet Phase of Exponential Growth”

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Photo courtesySophie del Campo, Head of Distribution for Southern Europe, Latin America, and US Offshore at Natixis IM

Natixis Investment Managers Landed in Spain 15 Years Ago. The timing could not have been more challenging, with the eurozone immersed in a severe sovereign debt crisis, but in the long run the strategy has paid off. Sophie del Campo, Head of Distribution for Southern Europe, Latin America, and US Offshore, has been part of the project from day one and describes herself as “super proud,” particularly because the office closed 2025 with record assets.

During an interview conducted at the Natixis Investment Managers Thought Leadership Summit 2026, recently held in Paris, Del Campo highlights the spectacular growth of Natixis IM in the Iberia region during this time, which she attributes “to the quality of the products we offer and the diversification they provide.” Last year, she also celebrated ten years since the opening of the first of the group’s three offices in the Americas: Mexico, Colombia (from where Peru is also covered), and Uruguay (which also supports Chile).

Today, the company maintains its strong commitment to active management and is doubling down on its multiboutique model, which Del Campo describes as “a spectacular differentiating factor,” and is fully engaged in its strategic plan for the coming years, which includes boosting its private markets business with the launch of new products soon. “We are in a quite sweet phase of exponential growth,” the expert summarizes.

What is your assessment of these 15 years?

The timing has been spectacular because it is true that when you open an office, from the moment people get to know you until you establish yourself, it takes time. And the time we needed to develop the business coincided with a somewhat more challenging market environment, but our strategy has been the same one we follow in all markets: a multi-manager, capabilities-based model, starting with a few ideas and a limited number of products. Today, we distribute in Spain products from 13 of our 16 asset managers; the three we do not distribute are purely American managers whose funds do not have a UCITS version.

Our strategy is super clear: we do not run product campaigns; we work with each client to identify what is simplest for their portfolios. This allows us to achieve diversification alongside the product offering. We think long term, about how to combine our active management with more basic strategies using high-quality, value-added products.

In addition to the product itself, we consider the service we provide alongside it to be even more important, particularly portfolio construction through our Natixis Investment Manager Solutions team and our Durable Portfolio Construction service, through which we have analyzed more than 2,000 client portfolios. This has allowed us to show clients how they could build portfolios that include competitors’ products while adding our own, helping us demonstrate to private bankers and fund-of-funds managers the value of incorporating new ideas.

How has product demand changed over these 15 years?

In recent years—and not only in Spain—we have observed strong demand for alternatives to purely passive exposure. This has allowed us to offer products from managers within our affiliated model such as DNCA or Harris Associates, which build portfolios in a very different way from passive managers.

Why do you strongly support active management?

We have always said that passive management is important, but active management is extremely important for diversification. Active management is also active risk management. And this is precisely what has driven our exponential growth in both equities and fixed income: after what happened in 2022, when there was high correlation between equities and fixed income, many clients asked us for fixed income positioning that goes beyond plain-vanilla indexed funds. We are fortunate to have an انتہائی diversified product range, solid in terms of return and risk, with products such as DNCA Alpha Bonds, a flexible fixed income strategy that provides significant diversification in portfolios.

Will you promote funds that offer access to private assets this year?

Our focus on private assets positions us as a highly relevant partner for institutions looking to begin distributing private asset products within their networks, because we have experience through our own network in France and are willing to share it with our clients. In addition, our group also provides seeding to ensure a significant asset base. We are an extremely conservative firm in this regard; we understand that this is a much more sophisticated and complex asset to sell, and that we must support our clients throughout this journey.

You are also responsible for the business in LatAm and US Offshore. How has it evolved?

We are quite proud of the development we are achieving in LatAm and Offshore. We have been the same team for ten years; we have built this together and achieved extremely interesting things in the region. For example, in Mexico we launched, together with Santander, a US equities product that is now the largest domestic fund in its category in Mexico, with more than $450 million.

What interests me about the Latin American market is that each country has a different framework in terms of regulation and product distribution. What we have done is determine, in each country, the strategy we wanted to follow, taking into account the market context to decide whether to focus on institutional clients or distribution clients. In Mexico, for example, we initially focused purely on institutional clients. But we realized, by speaking with our clients, that there was demand for higher-quality local products. That is why we decided to develop, together with Santander, a high-quality US equity product for its private banking arm, which is a very important component of private banking portfolios in Latin America.

In Colombia, our target is more evenly split among institutional clients, pension funds, private banking clients, and local asset managers. In Peru, we divide our focus between purely institutional clients and more market-oriented clients, including local institutions and family offices. In both markets, we see strong interest in diversifying with international assets.

Uruguay remains a hub for offshore private banking in Latin America, alongside the United States—Miami, Houston, etc.—and there are major private banks and key players we work with in both Uruguay and the U.S., and the results have also been very positive.

As a result, we have long been present in all major American private banks. In terms of results, I believe we are in the top two compared to other international asset managers, and in some American firms and distributors we were number one last year.

Where does Natixis IM stand now in the region?

We are currently in a very strong acceleration phase. Natixis IM is a somewhat different player in the region. Although we are a French group, we cannot be placed within the group of European asset managers due to our structure and the fact that 50% of what we manage globally is managed from the U.S. This makes us a very strong partner. As a result, we can bring U.S. expertise by offering products from U.S.-based managers such as Loomis Sayles or Harris Associates, while also providing our European expertise and products that are quite different from what our clients in the region previously had, such as the flexible fixed income fund from DNCA, where we are gaining significant market share.

For us, the Iberia–LatAm connection is just as important as the LatAm–US Offshore connection, because it allows us to achieve a strong alignment of interests with clients. We have an organization very similar to that of large Spanish banks with a presence in Latin America, which enables us to provide local support. We also work with major independent advisors.

What Does the Truce Between the U.S. and Iran Mean for the Markets?

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In 24 hours, markets have shifted from pricing in a potential “geopolitical black swan” to opening with broad gains—for example, in Europe, Germany’s DAX rose 5% and the UK’s FTSE 100 about 2%—and oil futures falling by approximately 14%, bringing Brent crude back below $100 per barrel (around $94). In addition, the US dollar index has dropped by around 1%, with the euro/dollar exchange rate returning above the 1.17 level for the first time since the start of the war. The reason is clear: there is a sense of relief following the announcement of a temporary ceasefire between the U.S. and Iran, as energy risk has decreased.

For markets, the key aspect of this agreement points to a “full, immediate, and secure reopening of the Strait of Hormuz,” although it remains to be seen how this will materialize. “Markets do not need absolute certainty to rebound; for markets, a ceasefire significantly reduces the risk of escalation in the short term. That reduction in tail risk is often enough to trigger a rapid repricing, even if long-term uncertainties persist,” says Ray Sharma-Ong, Deputy Global Head of Multi-Asset Custom Solutions at Aberdeen Investments.

For Matthew Ryan, Head of Market Strategy at Ebury, the word that describes markets today is relief. “Attention is now turning to the next critical negotiations between the United States and Iran. The key question will be whether these talks achieve lasting peace or whether Tuesday’s ceasefire has merely postponed the issue,” he states. In his view, market participants will not fully commit to “risk-on” trades, nor will oil futures or the dollar return to pre-war levels until a permanent agreement is reached. “As things stand, this remains only a temporary pause in the war, and despite the ceasefire, the dollar is still trading about 1% higher than before the conflict,” he notes.

Toward a Rebound

For his part, Sharma-Ong argues that today’s market moves have been seen before: “On April 9, 2025, the S&P 500 surged 9.5% in a single session after Trump announced a 90-day pause on reciprocal tariffs introduced on April 2, 2025. At that time, as in the current situation, several major uncertainties remained. However, the removal of extreme downside risk was enough to trigger a strong rebound.”

With this in mind, the Aberdeen expert ventures to say that in the following months, “markets surpassed previous highs.” “The relief rally is expected to be stronger in North Asia. Fundamentals will return to center stage, and these—not geopolitics—will lead markets if the geopolitical risk premium fades. In addition, we expect a stronger rebound in markets that were most affected by the oil crisis and the rise in risk aversion. Asian equity markets that are more dependent on oil imports, particularly Korea, Taiwan, and Japan, are likely to recover more quickly. These markets are more exposed to fluctuations in energy prices and global risk sentiment,” adds Sharma-Ong.

From an investor perspective, Michaël Nizard, Head of Multi-Asset and Overlay at Edmond de Rothschild AM, believes the key issue will be assessing macroeconomic impacts, particularly on growth, inflation, and monetary policy dynamics. “Although the risk of recession is not yet imminent, the effects will be clearly in the eurozone. Indeed, this geopolitical shock in the Middle East acts as an energy supply shock, reigniting global inflationary pressures and directly affecting growth. The rise in oil and gas prices is particularly harmful for Europe, whose industry remains dependent on these resources, increasing the risk of a loss of competitiveness,” he states.

However, Nizard considers this context different from that of 2022, when the global economy simultaneously faced a supply shock and excess demand linked to savings accumulated during the pandemic and large government fiscal stimulus: “The labor market is not under the same severe strain as in 2022. For all these reasons, we believe central banks should act cautiously and avoid overreacting to the rise in inflation in the coming months. A lower risk of monetary policy mistakes will also act as a tailwind for risk assets, both in equities and in the corporate debt market.”

The Energy Question

Another clear conclusion following the agreement is that energy markets may have passed the supply shock peak. “In line with our oil analyst’s view, energy markets have likely moved past the peak of the supply shock, as prices had already reached economically damaging levels, which typically trigger de-escalation dynamics,” highlights Christian Gattiker, Head of Research at Julius Baer.

In fact, this ceasefire comes at a time when energy markets were already showing initial signs of stabilization. “Even at the height of tensions, the scenario was never one of a total supply disruption, but rather of a partial and shifting opening. As highlighted in recent days, transport flows through the Strait of Hormuz have continued to increase, supported by Iran-protected routes and greater international involvement. Although still below pre-conflict levels, these flows—along with alternative export channels—have mitigated the supply shock and given energy supply chains room to adjust. This resilience is key,” adds Norbert Rücker, Head of Economics and Next Generation Research at Julius Baer.

According to Fidelity International, despite the drop in Brent prices on April 8, energy markets are unlikely to quickly return to pre-conflict price levels, as geopolitical premiums are likely to persist. “We assume that Brent will trade around $85 for the rest of the year following any resolution. In addition, risks to supply chains beyond energy markets imply that this shock will not disappear immediately. This impact will be felt most strongly in Asia, due to direct exposure to the Strait, followed by Europe. Despite being relatively insulated from the direct impact of this conflict, the United States will also feel the effects of the global macroeconomic shock and higher global energy prices,” they state in their latest analysis.

What Now

All this market optimism and the views of investment experts come with a warning: risk and volatility have not completely disappeared. “The ceasefire fits well within the established pattern of geopolitical crises, where an intense escalation phase creates the conditions for an eventual exit. This supports our base case of a fast and intense shock, with limited lasting damage to global energy supply. Although geopolitics in the Middle East will remain present, we expect energy markets to gradually decouple from political noise, reducing the risk of a sustained oil-driven macroeconomic shock. However, investors should be cautious in interpreting this as a definitive resolution. The conflict continues to follow a ‘reality show pattern,’ characterized by rapid escalations, tactical pauses, and renewed tensions,” warns Gattiker.

Experts clearly agree that the durability of a ceasefire and any conditional agreement that follows remains uncertain. There is also some skepticism that the United States or Israel will accept the 10-point conditions proposed by Iran, particularly as it seems unlikely that the U.S. would end its military presence in the Gulf.

“If the two-week ceasefire holds and some form of agreement is reached that allows the reopening of the Strait, the global economic impact of this conflict will be manageable. We would view this as a temporary price disruption that may not affect consumers or businesses in some economies. In that case, central banks could broadly resume the path they were on before the conflict. In fact, if commodity prices normalize quickly, attention could shift more toward the impact on growth,” explains Michael Langham, Emerging Markets Economist at Aberdeen Investments.

Fidelity International adds one final reflection: “Our view remains that the most likely outcome is a disorderly resolution, with geopolitical risk premiums likely to persist in the days following the war. Tail risks remain elevated, with an active risk that we could find ourselves in a situation where the parties continue to have incentives to escalate again in order to de-escalate, which entails clear asymmetric risks. Although we are likely closer to the end than the beginning of this conflict, high uncertainty persists. Meanwhile, market stress remains clearly visible in some channels.”