Internacional archivos - Página 2958 de 3623

On June 21 the Board of Governors of the Central Bank of Mexico will meet to decide the fate of the policy rate, we now expect them to hike +25 bps. In our view, the balance of risks to inflation deteriorated from the last meeting, pressuring Banxico to increase the policy rate to 7.75%, as MXN has been losing its shine. Last Friday we learned from the CME that the long peso non-commercial positions change to negative after peaking this year on April at 18 pesos per dollar (see Chart 1).

The right policy tool is a hike in rates compared to an outright intervention in the FX market. We judged that the current level of the MXN at 20.7 is fully explained by the general depreciation of emerging market currencies, and the increase in the size of the deviation between MXN and its peers relates to the recent rise in NAFTA and trade tariffs jitters (see Chart 2). In this context, an FX intervention will only be warranted if MXN level was out of context with current risks due to a speculative attack which is not the case.

The recent rout in emerging market currencies has proven to be more aggressive (and less temporary than previously thought) with those currencies perceived as their Central Banks being behind the curve. Standing out the Turkish Lira and the Argentine Peso, where their Central Banks were forced to hike since May to date 900 and 975 bps respectively. Also, India, Indonesia, and Philippines have hiked 25, 50 and 25 bps respectively. The market could well be starting to re-price the beginning of the year scenario of balance global growth benefiting emerging markets, to one where only the US growth is standing out. If this is the case, Mexico’s recent weak industrial production performance puts us at a disadvantage.

Even though we have argued that if something Banxico has been ahead of the curve, they will not want to miss an opportunity like this one to reaffirm their position. This is specially true when other risks particular to Mexico have increased, including the likelihood of the next administration negotiating NAFTA, the recently imposed tariffs on Steel and Aluminum, and the threat of the trade war escalating with direct consequences to inflation.

We believe Banxico will not miss this opportunity to reaffirm its ahead of the curve stance when the market is already pricing in the TIIE curve with more than 90% probability a 25 bps move in June. Also, the market is pricing +38 bps by August. With a +25 bps hike in June, Banxico will put itself in a better position to cover the new risks and the ones they have been more worried about related to a post-electoral dispute in case of a close outcome.

Column by Finamex, written by Guillermo Aboumrad, Chief Economist

Durante mayo, los precios de los acuerdos en fusiones y adquisiciones a nivel mundial tocaron nuevo récord

During May, Worldwide Deal Making Values Spiked to a New Record — Foto: David Buchi. Durante mayo, los precios de los acuerdos en fusiones y adquisiciones a nivel mundial tocaron nuevo récord

El mercado de valores de EE.UU. tuvo un excelente mayo, con el mejor rendimiento desde enero y el mejor desde mayo de 2009. Las incertidumbres políticas en Europa están aumentando a medida que se forma un gobierno euroescéptico en Italia y un gobierno recién elegido toma el control en España. La Reserva Federal de Atlanta elevó sus perspectivas de crecimiento económico de Estados Unidos en el segundo trimestre a un 4,7% a fines de mes, frente al 4% anterior. La economía robusta está estrechando el mercado de trabajo y los salarios y la inflación son el centro de atención.

Mientras tanto, la Administración de Trump ha impuesto aranceles a las importaciones de aluminio y acero de Europa, Canadá y México y está avanzando con acciones proteccionistas en China. Estos movimientos se basan en la idea de que las guerras comerciales pueden ganarse ya que las economías extranjeras dependen de los compradores de Estados Unidos. El estilo impredecible de comunicación y toma de decisiones del presidente Trump ha agregado una nueva variable a la recopilación de datos y al análisis de inversiones. Un nuevo ítem de la agenda en proceso ahora incluye la posibilidad de una guerra comercial de múltiples frentes, y movimientos de represalia pueden estar en camino.

Los beneficios corporativas registraron fuertes ganancias en el primer trimestre en conjunto, pero hasta ahora esto no se ha reflejado en un alza proporcional de los precios de las acciones. Además, una determinada Reserva Federal se mantiene en camino a normalizar las tasas de interés con continuos aumentos de las tasas de política y un balance general decreciente durante 2018 y hasta 2019.

La actividad de fusiones y adquisiciones se aceleró mucho más el ‘Lunes de Fusiones’ del 21 de mayo, ya que los acuerdos anunciados aumentaron los precios de los acuerdos anunciados hasta un nuevo récord por encima de los 2 billones de dólares (trillions en inglés). Los registros anteriores para los mismos marcos de tiempo se establecieron en 2007 y 2000, con 1,8 y 1,5 billones respectivamente. Los diferenciales de los acuerdos sujetos a revisiones chinas se confirmaron en mayo, incluido Cavium (CAVM -NASDAQ), que está siendo adquirido por Marvell Technology; Rockwell Collins (COL-NYSE), que está siendo adquirida por United Technologies; y, la compra por Qualcomm de NXP Semiconductor (NXPI-NASDAQ). Además:

El 15 de mayo, Microchip Technology anunció que recibió la aprobación antimonopolio en China para la adquisición de Microsemi Corp. (MSCC-NASDAQ), una buena noticia dada la reciente desaceleración de las revisiones chinas. El acuerdo se completó posteriormente el 29 de mayo.
Las acciones de Monsanto (MON-NYSE) cotizaban al alza luego de que Bayer llegó a un acuerdo con el Departamento de Justicia de los EE.UU. (DOJ) para vender activos a BASF que satisfacían las preocupaciones del Departamento de Justicia. En mayo de 2016, Monsanto aceptó ser adquirida por Bayer por 128 dólares en efectivo por acción, o alrededor de 66.000 millones. La transacción se cerró recientemente.
El desarrollador biofarmacéutico Avexis (AVXS-NASDAQ) fue adquirido por Novartis el 15 de mayo por 218 dólares en efectivo por acción, o alrededor de 8.000 millones de dólares.

Mayo fue otro mes activo para fusiones y adquisiciones con nuevas ofertas que incluyeron:

Shire plc (SHPG-Nasdaq), una compañía biofarmacéutica centrada en tratamientos para enfermedades raras, aceptó ser adquirida por Takeda Pharmaceutical Co. por 30,33 dólares en efectivo y 0,839 acciones ordinarias de Takeda por cada acción de Shire, o alrededor de 80.000 millones de dólares.
Grammercy Property Trust (GPT-NYSE), un REIT enfocado en la administración de bienes raíces comerciales, acordó ser adquirido por Blackstone por 27,50 dólares en efectivo por acción, o alrededor de 7.000 millones.
KLX Inc. (KLXI-NASDAQ) anunció que escindiría sus negocios de servicios de energía y vendería su negocio de distribución y servicios aeroespaciales a Boeing por 63 dólares en efectivo por acción. La transacción valora a KLX en aproximadamente 5.000 millones de dólares.

Seguimos estando bien posicionados para aprovechar las oportunidades continuas que estamos viendo en el mercado.

Columna de Gabelli Funds, escrita por Michael Gabelli

Para acceder nuestra metodología de inversión y cartera de arbitraje de fusión dedicada, ofrecemos los siguientes fondos UCITS en cada disciplina:

GAMCO ARBITRAJE DE FUSIÓN

GAMCO Merger Arbitrage UCITS Fund, lanzado en octubre de 2011, es un fondo abierto incorporado en Luxemburgo y que cumple con la regulación UCITS. El equipo, la estrategia dedicada y el registro datan de 1985. El objetivo del Fondo de Arbitraje de Fusión GAMCO es lograr un crecimiento de capital a largo plazo invirtiendo principalmente en transacciones anunciadas de fusiones y adquisiciones de acciones manteniendo una cartera diversificada. El Fondo utiliza un enfoque de inversión altamente especializado diseñado principalmente para beneficiarse de la finalización con éxito de las fusiones, adquisiciones, ofertas públicas, adquisiciones apalancadas y otros tipos de reorganizaciones corporativas propuestas. Analiza y supervisa continuamente cada transacción pendiente por posibles riesgos, incluidos: reglamentación, términos, financiación y aprobación de los accionistas.

Las inversiones de fusión son una alternativa altamente líquida, no correlacionada con el mercado, probada y consistente con los valores de renta fija y de renta variable tradicionales. Los retornos de fusión dependen de los diferenciales de oferta. Los diferenciales de oferta son una función del tiempo, la prima de riesgo de transacción y las tasas de interés. Por lo tanto, los rendimientos están correlacionados con los cambios en las tasas de interés a mediano plazo y no con el mercado de valores en general. La perspectiva de un aumento de las tasas implicaría un mayor rendimiento de las fusiones a medida que los diferenciales se amplíen para compensar a los arbitrajistas. A medida que disminuyen los mercados de bonos (aumentan las tasas de interés), los rendimientos de las fusiones deberían mejorar a medida que las decisiones de asignación de capital se ajustan a los cambios en los costos del capital.

La volatilidad del amplio mercado puede conducir a la ampliación de los diferenciales en las posiciones de fusión, que, junto con nuestras carteras de fusiones bien documentadas, ofrecen el potencial de TIR mejoradas. Las fluctuaciones diarias de la volatilidad de los precios junto con un capital menos propietario (la regla de Volcker) en los Estados Unidos han contribuido a mejorar los diferenciales de las fusiones y, por lo tanto, los rendimientos generales. Por lo tanto, nuestro fondo está bien posicionado como alternativa de sustitución de efectivo o renta fija.

Nuestros objetivos son acumular y preservar la riqueza a lo largo del tiempo, sin dejar de estar correlacionados con los amplios mercados globales. Creamos nuestro primer fondo de fusión dedicado hace 32 años. Desde entonces, nuestro rendimiento de fusión ha aumentado los activos de los clientes a una tasa anual de aproximadamente 10,7% bruto y 7,6% neto desde 1985. Actualmente, administramos activos en nombre de clientes institucionales y de alto patrimonio global en una variedad de estructuras de fondos y mandatos.

Class I USD – LU0687944552
Class I EUR – LU0687944396
Class A USD – LU0687943745
Class A EUR – LU0687943661
Class R USD – LU1453360825
Class R EUR – LU1453361476

GAMCO ALL CAP VALUE

El Fondo UCITS GAMCO All Cap Value, lanzado en mayo de 2015, utiliza el PMV patentado de Gabelli con una metodología de inversión Catalyst ™, que funciona desde 1977. El Fondo busca rendimientos absolutos a través de la inversión de valores impulsada por eventos. Nuestra metodología se centra en la inversión con un enfoque fundamental y bien investigado para conseguir las mejores oportunidades, con un enfoque en valores de activos, flujos de efectivo y catalizadores identificables para maximizar los rendimientos independientemente de la dirección del mercado. El fondo se basa en la experiencia de su equipo de cartera global y más de 35 analistas value.

GAMCO es un inversor activo de valores con enfoque bottom-up que busca lograr una apreciación real del capital (en relación con la inflación) a largo plazo, independientemente de los ciclos del mercado. Nuestro proceso de selección de valores orientado al valor se basa en los principios fundamentales de inversión articulados en 1934 por Graham y Dodd, los fundadores del análisis moderno, y aumentados por Mario Gabelli en 1977 con su introducción de los conceptos de Private Market Value (PMV ) con un Catalyst ™ en el análisis de la renta variable. PMV con Catalyst ™ es nuestra metodología de investigación única que se enfoca en la selección de acciones individuales identificando empresas que se venden por debajo del valor intrínseco con una probabilidad razonable de realizar sus PMV, que definimos como el precio que un comprador estratégico o financiero estaría dispuesto a pagar por la totalidad empresa. Los factores de valoración fundamentales es utilizada para evaluar valores antes de la inclusión / exclusión en la cartera, nuestro enfoque, impulsado por la investigación, considera el análisis fundamental como un enfoque de tres frentes: flujo de efectivo libre (ganancias antes de intereses, impuestos, depreciación y amortización, o EBITDA, menos los gastos de capital necesarios para crecer / mantener el negocio); tendencias de ganancias por acción; y el valor de mercado privado (PMV), que abarca los activos y pasivos dentro y fuera del balance. Nuestro equipo llega a una valoración PMV mediante una evaluación rigurosa de los fundamentales de la información disponible al público y el juicio obtenido de la gestión de reuniones, que abarca empresas de todos los tamaños a nivel mundial y nuestro amplio conocimiento acumulado de una variedad de sectores. Luego identificamos negocios para la cartera con un margen adecuado de seguridad y respaldado por nuestra investigación profunda.

Class I USD – LU1216601648
Class I EUR – LU1216601564
Class A USD – LU1216600913
Class A EUR – LU1216600673
Class R USD – LU1453359900
Class R EUR – LU1453360155

Armistead Nash (Morgan Stanley Investment Management): “We Try to Invest in Those Companies that Are Exposed to Minimal Disruption Risk”

This year, Morgan Stanley Investment Management is celebrating the 20th anniversary of the Growth Team. The team’s strategies emphasize long-term concentration of capital in what the team believes to be high quality companies with sustainable competitive advantages and an attractive free cash flow profile: MSIF Growth Portfolio, MSIF Advantage Portfolio and MSIF Global Advantage Portfolio.

To commemorate this milestone, Morgan Stanley’s distribution team for the Latin American and US Offshore business, led by Carlos Andrade, invited more than 80 investment professionals, including fund selectors, portfolio managers, CIOs and top producing offshore financial advisors, to the EAST Hotelin Miami to participate in a discussion about disruption and permanence and how both concepts are incorporated into portfolios. Leading the debate, three members of the Growth Team: Stan DeLaney, Managing Director and disruptive change researcher, Armistead Nash, Managing Director and an investor on the team, and Mary Sue Marshall, Managing Director and portfolio specialist; who shared their views on secular trends and big changes coming from disruption on technology and disruption in business models.

The disruption landscapes

According to the Growth Team, disruptive changes play a very important role in their research process. As long-term investors, they focus on companies they believe to have a sustainable competitive advantage. To separate the wheat from the chaff, they need to have a good handle on the competitive environment that these companies face and the tech disruptive forces that may impact them over time.

From their experience, they state that disruption almost always fits into one of two types of paradigms: bottom-up disruption or top-down disruption. The first one, would represent those products or services that are not that good, but are so much cheaper than anything else in the market. Over time, people adopt them, the products or services improve, and the adjustable markets expands. The second type, a top-down disruption, would consist of those products or services that have a premium performance and price comparing to existing offer in the markets. As the technology improves, their cost declines and their markets expand.

“Back in 2004, we started working on the digitalization of advertising. At that time, executive directors and media had already realized that online advertising was a completely different animal, mainly because of its measurability. Our hypothesis was that, over time, companies will eventually migrate their ads from traditional media into internet. Fourteen years ago, 20% of the media time was spent on the internet, but only 4% of the advertising dollars were spent there. The relationship between advertising dollars and GDP has always being about 2% to 3%, and we do not think that will change. Today over 35% of advertising dollars are spent online, being online roughly internet and mobile, and over 50% are media that have transferred to online”, said Stan DeLaney.

Optimizing for the minimal disruption risk

Additionally, Armistead Nash believes that it is necessary that investors have a view on disruption and the competitive landscape the companies they invest in are facing. Especially nowadays, in a world where disruption is happening faster than ever before, driven by several different forces.

“One important factor of disruption is certainly the internet software space. The price of computing power has come down significantly with the advent of large cloud infrastructure players. Small businesses now have the capacity to outlay less capital investment upfront for their technology infrastructure. They can just rely on the computing power provided by these large cloud infrastructure players, and consequently, there are more start-ups coming to the internet and software space. We also feel that, with the advent of the internet and global funds, companies can have a broad distribution and approach to services like never before at a much lower cost. All these factors are driving an accelerated pace of innovation and change and starting out some new competition. It is precisely in this environment when it is more important to have a handle on the competitive landscape and to have a view out for the next three to five years, to invest in those companies that are exposed to minimal disruption risk”.

Considering its relation to disruptive change, Nash differentiates four groups of stocks: “First, we try to invest in companies that offer a product or service with very few or no substitutes. Second, we invest in companies that have an innovative culture, that despite incurring into failures, continue to invest a significant amount of capital back into new product launches. The third type of stock that we include in our portfolios are those that have the willingness to alter their product or business model based on the consumer preferences or the market demand. And, finally, the fourth type of company we invest in, are those companies that are not over-earning or over-charging relatively to the value that they provide to customers, avoiding creating an environment in which other enterprises can generate disruption in terms of pricing.

At a portfolio level, we intend to mitigate the impact of disruptive change from a risk manager perspective. First and foremost, we make sure we are using conservative assumptions in our financial projections for the companies that we invest in. Next, we avoid those businesses in which we do not have an edge on or we do not feel we have a competitive advantage”, he explained.

Sandra Crowl (Carmignac Gestion): “We Are in the Start of a Structural Dollar Depreciation Tendency”

For more than ten years, Sandra Crowl has been both Member of the Investment Committee and a Portfolio Advisor at Carmignac Gestion, the European leading asset management firm that was founded in 1989 by Édouard Carmignac and Eric Helderlé. Ms Crowl, who holds a bachelor’s degree in Economics and French from the University of Melbourne and, since 2007, is also a Chartered Alternative Investment Analyst (CAIA). She started her career at Bankers Trust Australia in 1987, before transferring to Paris in 1991. Two years later, she became Managing Director and Head of European Foreign Exchange in London. In 2003, she returned to Paris and specialized in fund management seeding at New Alpha Advisers, a subsidiary of ADI. Four years later, she joined Carmignac Gestion.

Latin American investors be aware

Ms. Crowl believes that the tightening of Central Bank’s liquidity is going to create a great deal of volatility in fixed income markets, therefore, investors -particularly Latin American investors who traditionally have a fixed income bias-, should change their focus away from passive management towards active management. “We are seeing a great deal of interest in our unconstrained global bond strategy, a strategy that provides the flexibility necessary in a rising interest rate environment. It is a non-benchmark strategy able to invest across sovereign and corporate debt, both in developed and emerging markets. Considering our commitment to investors, we want to make sure that we provide an appropriate risk framework for them. We do contain some of the risks by having internal limits on some sub-classes of bonds, like the contingent convertible bonds or structured credit. We have four fixed income strategies and all them, at the aggregate part of their portfolio, must have an average credit rating of investment, they will not ever become high yield strategies,” she said.

On the bond side, Ms. Crowl suggests a very diversified bond portfolio that is still concentrated on sovereign issuers that are providing high real yields today. That would be the case of the sovereign debt in Greece, Mexico or Brazil. “Sovereign bonds with good real yields will act as a cushion for future volatility. Using our expertise for identifying value opportunities, we could also invest in cheap corporate bonds that are perhaps being sold off indiscriminately by the market. We also want to build up our portfolios in structured credit strategies based on floating rates, a suitable asset class in a rising interest rate environment,” she added.

Carmignac’s unconstrained global bond strategy aims to protect investors in a bond bear market. As is clear in the Funds prospectus, the strategy has the capacity to actively manage modified duration, ranging from -4% to 15% and it can take short and long positions in currencies. “If we are invested in a country where there is short term volatility, we may want to hedge the currency for short periods but stay invested in the local debt of the country. That is the case of Brazil today, while we are very confident about their macroeconomic recovery and improved current account , we are less sure of the political outcome of elections later this year. Whereas in Mexico, we have chosen not to hedge the currency, that is to stay invested in local currency debt.”

Uncertainty in Latin American

Ms. Crowl states that, despite the short-term risk that Argentina is currently experiencing, Carmignac Gestion is very positive about the fundamental improvements through economic reforms achieved since Mr. Macri became president. “Recently investors lost confidence in the independence of the central bank, inflation was accelerating, but Mr. Macri has always delivered on budget reform. He has recently promised even more constraint with will sooth credit agencies nerves. And we expect inflation to drop back in the second half of the year. Some large international money managers have already bought back into the asset class just one week after the Central Bank of the Republic of Argentina raised rates and Macri asked the IMF for a credit line. The announcement of the assurance by IMF to provide funding necessary for future months will be considered as a positive catalyst. Also, they could obtain support albeit smaller from the Bank of International Settlements.”

Regarding Mexico, this year elections have added uncertainty to the ongoing renegotiation process of the NAFTA agreement. “It appears that Mr. López Obrador will lead the incoming government. This provides a bit of challenge going forward should the NAFTA agreement be decided before US mid-term elections. We believe the new government may create some difficulties with whatis has been previously signed under Peña Nieto’s term. There is a small degree of risk premium built into Mexican assets today, the election risk is being correctly priced by markets. We believe Mexican assets will be positively revalued as soon as a relatively friendly NAFTA agreement can be discerned,” she added.

A not so positive view on the US or the dollar?

For 2018, the market consensus is expecting a 2.8% of GDP growth in the US, but Carmignac Gestion is expecting a slightly less, something around a 2.2% for the end of the year. “We do not anticipate the investment cycle to be as robust as it has been in last years. We do not think that corporate firms will be able to use the fiscal reform to create jobs or to implement strong capital expenditures programs, but rather to paid down debt or buy back stock. We are not seeing the strength in the order books of cyclically oriented companies that perhaps growth-oriented companies have. But we are invested in the US, in an overweight nature if we compared to the benchmark and are positive about the country’s economy. Particularly in equity, we are invested in some of the very strong secular growth themes: in the disruption created by e-commerce, the change in spending patterns, the digitalization of the economy, the increase of energy efficiency, the improvement of connectivity and cloud usage. All these themes provide strong secular earnings, generating very good returns on equities. We are investing on technological multinationals, but we are also focusing on companies that offer specific services to US corporations that need to improve their capacity. And we are bearish on the companies that are challenged by this new digitalized environment. In some strategies, we have the capacity to sell against a corporation that we have in effect a long-term position and that we have identified that would be challenged. This is part of how the portfolio is constructed to compose the winners and losers of this digital era”.

On the dollar, Carmignac Gestion believes a structural dollar depreciation tendency is about to start, despite the dollar has strengthen a little bit lately in the face of raising short-term interest rates. The new issuances made by the US administration to finance part of the tax fiscal stimulus created some pressure on the short end of the interest curve, but there are some medium-term influences that will determine the dollar value. “In the US, current account and budget deficits are deteriorating. The budget deficit would be hitting towards a 6% of GDP. Also, the implementation of tariffs and trade barriers can affect the current account. Initially, imported goods subjet to tariffs will be costlier for the US to import. And, historically, in the periods in which the US is maintaining a loan with the rest of the world, the US economy needs to be ahead in the economic cycle for the US dollar to remain strong. But, today we have a synchronized global recovery, and that usually reflects in a dollar bearish period that may last for 5 or 6 years. That is how cycles have behaved since World War II,” she explained.

A deceleration in Europe?

According to Ms. Crowl, Germany is signaling small a slowdown, but it will not probably be reflected on the economy for as long as the European Central Bank continues with its Quantitative Easing program. Since the global financial crisis, the world economy has experienced mini-cycles that have lasted around 18 months or 2 years, there have not been 5 or 6 years boom and bust cycles due to Central Banks’ intervention in the markets, which created a distortion in prices. Now, the liquidity retraction started by Central Banks could lead into another shallow dip recession.

“The interest rates in Germany are still around 60 basis points for the ten-year bond, when they have an over 2.5% GDP growth rate and a 2% inflation rate. It makes no sense; interest rates need to be normalized. For this year, the growth rate may still be above 2% because the ECB will continue to purchase 30 billion euros worth of European bonds on monthly basis to the end of the year. However, 2019 will be quite challenging year for European bonds. In the meantime, bond curve has started to price in Quantitative Easing tapering and we are positioned rather tactically to pick up performance. We intend to benefit from rising interest rates by having short positions in German bonds, actively managing duration, a feature that fixed income investors would need to consider”.

Serie de tasas crecientes: Los altibajos de las escalas de bonos

Rising Rates Series: The Ups and Downs of Bond Ladders — Photo: zaimoku_woodpile. Serie de tasas crecientes: Los altibajos de las escalas de bonos

Los ETFs de madurez definida pueden hacer que la escala sea más simple y más diversificada. Por ejemplo, en lugar de comprar un único bono de cinco años y mantenerlo hasta su vencimiento, podrías construir una escala de cinco años con bonos que venzan cada junio durante los próximos cinco años. Cuando un bono se venza, puedes comprar un nuevo bono de cinco años con los ingresos (mira la ilustración). El atractivo para los inversores es que proporciona un flujo de caja estable: cada año, tienes dinero nuevo para reinvertir a partir de un bono en vencimiento, así como los pagos de cupones semestrales de los bonos.

La capacidad de gestionar las exposiciones de forma anual puede ser especialmente beneficiosa en un entorno de tasas crecientes. A medida que las tasas de interés cambian durante el período, cada bono en la escala tendrá un rendimiento total similar al rendimiento promedio en el momento de la compra. Al bloquear un rendimiento al principio, la escala ayuda a aislar al comprador de bonos de las pérdidas de precios si el inversor lo mantiene hasta su vencimiento.

Gráfico solo con fines ilustrativos.

Como con muchas cosas, sin embargo, esta estrategia es simple en teoría, pero más complicada en la práctica. Para muchas personas, administrar una cartera de bonos individuales no es fácil.

Pequeños peces en un gran mar

El primer desafío es seleccionar los bonos. ¿Deberías ir solo a un emisor que conoces? ¿El bono de mayor rendimiento? ¿O el que tiene la mejor calificación crediticia? Investigar la calidad crediticia del emisor requiere acceso a la información y los conocimientos técnicos para evaluar el valor relativo entre los bonos. Incluso para inversores con experiencia, esto puede ser desalentador.

Una vez que hayas decidido comprar un bono, los costos de transacción pueden ser altos. El inversor minorista promedio paga aproximadamente 0,90 % en el diferencial de oferta y demanda en bonos municipales y 0,64 % en bonos corporativos, de acuerdo con S&P¹. Muchos bonos tienen tamaños mínimos de bonos para comprar y comerciar. Si no tienes una gran cantidad de dinero para invertir, la capacidad de diversificar y distribuir el riesgo de crédito entre múltiples emisores puede ser difícil. Como resultado, puedes terminar con una cartera concentrada de solo un puñado de emisores de bonos.

Finalmente, la liquidez, o la capacidad de convertir el bono en efectivo, puede ser un desafío para valores individuales. Si deseas vender un bono antes de su vencimiento, deberás buscar otro comprador en el mercado de bonos extrabursátiles, lo que puede llevar tiempo. Y si tu bono tiene una función de demanda, puedes recibir el reembolso anticipado si el emisor decide refinanciar su deuda. En ese caso, enfrentas una reinversión a menores rendimientos.

Escalamiento con ETFs con vencimiento definido

Muchos inversores utilizan fondos mutuos y fondos cotizados (ETF) para superar algunos de estos obstáculos. Los fondos tradicionales generalmente tienen una cartera diversificada de bonos y tienen un administrador de cartera que supervisa y administra el fondo. El único inconveniente es que debido a que los fondos tradicionales no tienen fechas de vencimiento, el inversor tendría que vender una parte del fondo si quieren sacar dinero de la estrategia.

Explore el escalamiento con la iBonds Ladder Tool.

Los ETF de bonos con vencimiento definido, como iShares iBonds, pueden ayudar a construir escalas de bonos eficientes combinando el control de la reinversión de los bonos individuales con la conveniencia de un ETF. En una sola transacción, los inversores obtienen acceso a:

Un vencimiento conocido: Todos los bonos vencen durante el año calendario a nombre del fondo. Por ejemplo, los bonos en iShares iBonds Dic 2021 Término corporativo ETF (IBDM) vencen entre el 1 de enero y el 1 de diciembre de 2021. Cuando vence el último bono, el fondo devuelve su valor liquidativo final a los accionistas en efectivo.
Distribuciones mensuales: Los fondos de bonos con vencimiento definido hacen distribuciones mensuales de ingresos, que pueden ser más suaves que los pagos a granel de cupones de una escala de bonos. Las distribuciones mensuales pueden ser variables dependiendo de los cambios en los rendimientos del mercado y los activos del fondo.
Diversificación: Cada ETF posee cientos de bonos de grado de inversión.
Capacidad de comercialización: Mientras que los bonos individuales se negocian en el mercado de bonos extrabursátiles, los ETF de vencimiento definido se pueden negociar a lo largo del día en la bolsa a un precio conocido.
Bajo costo: Los ETF pueden ser más rentables que comprar una cartera de bonos de venta libre. Por ejemplo, iShares iBonds municipales y corporativos tienen comisiones de administración de 0,18 % y 0,10 %, respectivamente.

Volviendo a nuestro ejemplo de la escala de bonos a cinco años, un inversor podría comprar solo cinco ETF de vencimiento definido y obtener exposición a cientos de bonos subyacentes con fechas de vencimiento conocidas, un flujo de ingresos mensuales, y una experiencia global que es mucho más simple que hacerlo por si mismo.

Build on Insight, de BlackRock escrito por Karen Schenone, CFA

1: Fuente: Unveiling the Hidden Costs of Retail Bond Buying & Selling. S&P Dow Jones, marzo de 2018.
Invertir implica riesgos, incluida la posible pérdida del capital.
Antes de invertir, considere detenidamente los objetivos, factores de riesgo, cargos y gastos de la inversión. Esta y otra información se pueden encontrar en los prospectos de los Fondos o, si están disponibles, en los prospectos resumidos, que se pueden obtener visitando iShares.com o www.blackrock.com. Lee el prospecto detenidamente antes de invertir. Invertir implica riesgos, incluida la posible pérdida del capital.
Los riesgos de renta fija incluyen las tasas de interés y el riesgo de crédito. Normalmente, cuando los tipos de interés suben, hay una correspondiente disminución en los valores de los bonos. El riesgo de crédito se refiere a la posibilidad de que el emisor del bono no pueda realizar los pagos de capital e intereses.
Al comparar acciones o bonos e iShares Funds, debe recordarse que los honorarios de gestión asociados con las inversiones de los fondos, como iShares Funds, no son asumidos por los inversores en acciones o bonos individuales. La compra y venta de acciones de iShares Funds generará comisiones de corretaje.
Es posible que haya menos información sobre la situación financiera de los emisores municipales que para las corporaciones públicas. El mercado de bonos municipales puede ser menos líquido que el de los bonos gravables. Algunos inversionistas pueden estar sujetos al impuesto federal o estatal sobre la renta o al Impuesto Mínimo Alternativo (Alternative Minimum Tax, AMT). Las distribuciones de ganancias de capital, si las hay, están sujetas a impuestos.
iShares® iBonds® terminará en marzo, septiembre o diciembre del año a nombre de cada Fondo. No se garantiza una inversión en iShares® iBonds® ETF («Fondos»), y un inversor puede experimentar pérdidas, incluso cerca o en la fecha de finalización. A diferencia de una inversión directa en un bono que tiene un pago de cupón nivelado y un pago fijo al vencimiento, el/los Fondo(s) realizarán distribuciones de ingresos que varían a lo largo del tiempo. En los últimos meses de la operación de cada Fondo, a medida que los bonos se mantengan maduros, su cartera pasará a efectivo e instrumentos similares a efectivo. Como resultado, su rendimiento tenderá a moverse hacia las tasas prevalecientes del mercado monetario (o, en el caso de los iBonds municipales, tasas del mercado monetario exentas de impuestos) y puede ser menor que los rendimientos de los bonos anteriormente mantenidos por el Fondo y menor que los rendimientos prevalecientes en el mercado de bonos.
Después de la fecha de finalización del Fondo, el Fondo distribuirá sustancialmente todos sus activos netos, después de la deducción de cualquier pasivo, a los inversores en ese momento sin previo aviso y ya no se cotizarán o negociarán. Los ingresos de liquidación y distribución de los Fondos no son predecibles en el momento de la inversión y los Fondos no buscan devolver una cantidad predeterminada.
La tasa de pagos de distribución del Fondo puede afectar negativamente la caracterización fiscal de los rendimientos de un inversor a partir de una inversión en el Fondo en relación con una inversión directa en bonos. Si la cantidad que un inversionista recibe como producto de la liquidación a la terminación del Fondo es mayor o menor que la base del costo del inversor, el inversor puede experimentar una ganancia o pérdida a efectos fiscales.
La inversión en iShares® iBonds® Corporate ETFs está sujeta a los riesgos de los otros fondos y ETFs (fondos subyacentes) en los que invierte. Los iShares® iBonds® Corporate ETFs incurrirán en honorarios de fondos adquiridos y gastos asociados con sus inversiones en los fondos subyacentes y cargos adicionales asociados con la rotación en los fondos subyacentes que no están incluidos en los honorarios y gastos del fondo adquirido.
Es posible que la diversificación y la asignación de activos no protejan completamente ante los riesgos del mercado o la pérdida de capital.
No existe ninguna garantía de que se desarrollará o mantendrá un mercado de negociación activo para las acciones de un ETF.
Los fondos son distribuidos por BlackRock Investments, LLC (junto con sus afiliadas, “BlackRock”).
Este material no debería ser interpretado como un pronóstico, investigación o consejo de inversión y no es una recomendación, oferta o solicitud de compra o venta de cualquier título o de adopción de cualquier estrategia de inversión. Las opiniones expresadas son válidas a partir de mayo de 2018 y pueden cambiar si las condiciones subsiguientes lo hacen. La información y las opiniones que se incluyen en este material derivan de fuentes privadas y públicas que, a criterio de BlackRock, son confiables, no son necesariamente globales y no cuentan con veracidad garantizada. Por lo tanto, no existe ninguna garantía de veracidad o fiabilidad, ni se acepta responsabilidad alguna que derive de cualquier modo de errores u omisiones (incluida la responsabilidad ante cualquier persona a causa de negligencia) por parte de BlackRock, sus ejecutivos, sus empleados o sus agentes. Este material podría contener información prospectiva que no sea puramente histórica por naturaleza. Tal información podría incluir, entre otras cosas, proyecciones y predicciones. No existe ninguna garantía de que las proyecciones expresadas se cumplan. La confianza en la información en esta publicación queda bajo la exclusiva discreción del lector. El rendimiento pasado no es garantía de resultados futuros. La rentabilidad del índice se presenta solo con fines ilustrativos. No puede invertir directamente en un índice.
©2018 BlackRock. iSHARES y BLACKROCK son marcas comerciales registradas de BlackRock. Todas las demás marcas pertenecen a sus respectivos propietarios.

Jean Raby, CEO of Natixis IM: “I Would Be Very Surprised if We Do Not Announce One or Two More Acquisitions by the End of the Year”

Jean Raby, Chief Executive Officer of Natixis Investment Managers (Natixis IM) and a member of the senior management committee of Natixis, joined the firm sixteen months ago. Since February 2017, he oversees Natixis IM’s Asset Management, Private Banking and Private Equity business lines. Of French-Canadian origin, Mr. Raby began his career in 1989 as a corporate lawyer with Sullivan & Cromwell in New York, where he worked in corporate finances projects based in Argentina, Chile and Mexico. Later, in 1992, he got transferred to the Paris office.

After four years, he joined Goldman Sachs’ investment banking division, where he worked for sixteen years in corporate finance, M&A, restructuring and capital markets, as well as he worked occasionally in asset management projects. He became a Partner of the firm in 2004, he served as CEO of the division for France, Belgium and Luxembourg and head of the firm’s Paris office in 2006 before becoming co-CEO of Goldman Sachs in Russia in 2011. Then in 2013, he served as Executive Vice President and Chief Financial and Legal Officer for Alcatel-Lucent, the global telecom equipment manufacturer, at a time when the company was on the verge of bankruptcy. A year and a half later, they were able to sell the company to Nokia for 15 billion euros. He subsequently served as Chief Financial Officer of SFR, an integrated media operator in France. But, he missed the hectic and fast pace environment of the asset management industry, so he decided to sign with Natixis.

The value proposal

Mr. Raby firmly believes that Natixis IM offers an attractive value proposition to those asset managers that want to expand their business but feel they have hit a glass ceiling in their growth. “You would be surprised by how many asset managers want to enlarge their business but, either because the pressure of the regulation or their need for investing in technology, they do not have the time or find it difficult to go through the effort of distributing their products outside their niche markets. That’s when they come to us. We want them to do what they do best, which is to manage money, and we take care of everything else, preserving the autonomy of the investment process. On the other hand, in Europe, and to a lesser extent in the US and Canada, sizable asset managers are owned by a financial institution. Their DNA is to stick with the footprint of the financial institution to which they belong to, and there is very little momentum or incentive to do something different than that of their parent company. In our case, we have the strength and solidity of a large banking group, but we are not constrained. In fact, we benefit substantially from the stability of the structure and the financial support. However, we are able to act nimbly and demonstrate the entrepreneurship of a third-party business. We manage very little of our own money, and that is a unique feature, you will not find many asset managers of our size owned by financial institutions that are so focused on third-party’s money. We are the only one, and that is an additional value-add to these partnerships, to offer the stability of a long-term shareholder,” he said.

In September of 2017, the firm made its most recent transaction. Natixis IM, which has a network of 26 autonomous asset managers affiliates, acquired a majority stake in Investors Mutual Limited, an Australian fund management company, as part of its plans to expand in the Asian region. “I would be very surprised if we do not announce one or two more acquisitions by the end of the year. It is about adding entrepreneurial teams joining us; we seek asset managers that have a strong track record of generating performance and that have a brand. That will be right set up for us, either because we bring a solution to them and the support of a long-term shareholder, or because they bring something new to us, like a platform that our other affiliates can use or a strategy or investment category that supplements our offering. We want to do business with management teams that we consider our partners,” he added.

Natixis seeks the growth of their affiliates’ business. For this, they offer a centralized distribution throughout the world. “In our business model, we respect the autonomy of our asset managers in their investment process and allow them to upgrade their business. For example, in 2015, we welcomed DNCA Finance into the group, a value equity France-based asset manager. At that time the firm had 14 billion euros of asset under management. Today, the firm has more than 25 billion euros. We accomplished that figure in only three years and with tremendous pressure on fee rates. We can maintain pricing because our clients see value -we do not sell expertise cheap-, and because there is a central management of distribution, creating a healthy discipline. We are also trying to mutualize investments on technology, finding the right balance between the investment autonomy of the affiliates and the benefits of sharing technological developments. The group is defining its digital roadmap, and we are going to add more joined development of technological innovations that hopefully will benefit everyone.”

Active vs passive asset management

Although Mr. Raby acknowledges that passive asset managers have dominated the market narrative in the latest years, the return of volatility may, in his opinion, turn the tables. “Passive investment is here to stay, but we are not going to participate in that business and we are not going to change our strategy. Volatility has returned, we may be at the end of a 35-year bond bull market and at the end of a 10-year equity market. In a more volatile and uncorrelated environment, an active approach to managing risks and chasing opportunities may make more sense. Individual investors will have a rough wake up call when they realize that with greater transparency and disclosure on fees, passive investment is not as cheap as it seems. People will hopefully start looking beyond the low fees and study the actual performance deliverance after fees, which is what really matters. When that happens, I am confident the value proposition of active management will be recognized.”

Long-term savings

In Europe, long-term savings have not been privatized, by contrast, that has been the case in the US, Canada, UK and Australia, thus funding the savings for retirement. These countries are the fourth largest asset managers markets in the world, being China the fifth largest market, and that is mainly because they have a population 1.6 billion of people. There is a big question mark on whether, in ten to twenty-year time, those people who relied on defined contribution plans, abandoning defined benefits plans, will have enough savings for retirement. According to Mr. Ruby, experience demonstrates that people with the right incentives for long-term savings will save enough for retirement, without having to depend on the government. “At the end of the day, if it materializes that the privately arranged retirement systems are no sufficient to fulfill the needs of the population the government will have to chip in. I would hope for a bigger debate on the privatization of long-term savings in Europe. There should be greater tax incentives for people to save and a strive for the right balance. In Canada, there is a mix of both systems, people are encouraged to save through tax incentives and yet, they also have the promise of a basic retirement savings for everybody. Even the US created the 401k plans, with lots of tax incentive to do so, with does encourage people to be prepared, and I think that is the way to go. In UK, the debate is also out in the street, but unfortunately there is no enough discussion in Europe right now. In France, we are having the debate on pensions and insurance policies, trying to get some more flexibility, but I wish we could go further and discuss about private pension funds.”

The growth opportunities

Natixis IM has a history of 25 years of presence in Europe and the Americas. Their arrival in Latin America is more recent but is a key piece in their growth plans: “When I arrived last year, one of the first conversations that I had with Sophie Del Campo, -Executive Managing Director, Head of Iberia, Latin America, and US Offshore, at ‎Natixis Investment Managers, was about the opportunity in Latin America. Obviously, we want to be careful, invest for the long term and with a steady approach. On the other hand, we think that the region is an opportunity for us to locally manufacture products, but again we need to find the right partner in the region with four characteristics: entrepreneurial character, a good brand, a good performance track record and that we can bring something to them in terms of revenue synergies, or that they can bring something to the group. This type of partner does exist, but it takes time to find it,” he concluded.

How Family Offices Allocate Their Capital

According to Vidur G. Gupta, Finance Expert at toptal and based on a report by UBS, the origins of a given family’s wealth determines the family offices’ risk appetite, its investment style, and its allocation choices. US and Asian families are most keen on investing in “growth” assets, with heavy weighting toward venture capital and private equity.

iCapital research shows that first-generation single family offices tend to prefer alternative assets such as real estate, private equity, and venture capital. In addition to the generation, country, and origin of wealth, the sfamos’ strategy is also defined by the size and stage (institutional maturity/experience) of the family office itself.

Longer-tenured family offices increasingly employ experienced management teams to invest their capital across an array specialty asset classes. This is especially true for active positions in equity and bond markets, given family offices have historically invested in hedge funds or private equity funds as fund-of-funds investors. The increasing size of Famos and desire to have stronger control over investments and outcomes has propelled them to “insource” professional management teams.

As an asset class, private equity also holds some other advantages over hedge funds regarding family offices. It fits with families’ “emotional desire to back entrepreneurs and ideas they believe in,” according to Philip Higson, Vice Chairman of the family office group at UBS.

“In the search for yield, family offices are playing to their strengths by allocating longer-term and accepting more illiquidity,” a report from UBS and Campden Wealth notes. “This approach is successful when experienced in-house teams have sufficient bandwidth for conducting due diligence and managing existing private market investments.”

Anupam Damani (TIAA Investments): “Mexican Elections Are Considered a Buying Opportunity Given the High Nominal and Real Rates of the Country”

TIAA Investments’ Emerging Market Debt strategy, which has a track record of more than ten years, launched in October 2015 an UCITS fund with an Irish domicile. The fund, which is about to reach the three-year milestone, has a solid track record versus the benchmark and against its peers on absolute and on risk-adjusted return basis and around 36 million dollars in assets under management-although its team manages around 13 billion at the strategy’s level.

Anupam Damani, managing director and portfolio manager, works together with Katherine Renfrew and a team of 14 analysts in managing the TIAA Investments’ Emerging Market Debt strategy, which she defines as a blended strategy with a hard currency bias. Its benchmark, the JP Morgan Emerging Markets Bond Index Global Diversified is a hard currency sovereign index benchmark and it anchors how much local market risk they want to take in the portfolio. They tactically add exposure to local markets, an allocation that may range from a 0% to 30%.

“Our typical allocation to local markets is between the 10% to 15% area. We have been building that allocation in the last few years because we have been very positive on Emerging Market’s local markets, both on the rates space, because the real rates are quite high in the end local markets, but also in Emerging Markets foreign exchanges. In the earlier dollar rally of 2013-2014 and 2014-2015, we saw that, in an aggregated level, EM foreign exchanges had depreciated a bit. There are some exceptions to this rule and that may be Turkey and Argentina, both economies showing home-grown problems”, says Damani.

“The team has the breadth and the scope to be able to look through the hard currency sovereign and corporate bonds and local debt markets. The portfolio is a mix of all three segments of the asset class, and we nimbly allocate among of these few segments where we prudently see the most compelling opportunities are. In the sovereign segment, the team has an early advantage of following the frontier market economies, which are the newer emerging markets so to speak. We have been doing a lot of due diligence and research deep down diving to frontier market and idiosyncratic stories in the sovereign space”, she adds.

The team believes that diversification is key, even though they have high conviction ideas. They normally hold about 30 to 35 countries in the strategy while the index has 67 countries on it. They pick their bets and they are very focused on selection, but at the same time they believe in diversification because that is what works through economic cycles. They also have a special focus on risk and liquidity management. Any time they get into a position they make sure that they would be allowed to undo the position in times of stress, when the exit window is smaller.

Conviction ideas

According to Damani, the recent events that have taken place in Argentina had made its debt market begin to look attractive again. “We are waiting for some more signs as to what the IMF is going to demand from the government and to see the impact of the announcement on the polls for President Macri. The political and social stability will be an important cornerstone of how aggressive Macri’s government can be in acting with IMF demands, but we think that part of the adjustment has been done, and the responsiveness by the government despite the initial stumble was quick. It was a bold and necessary move by the government and we like that, but, we also are cautious. After watching for those signs, we may look to build into that position in both the local and the hard currency space”.

From April 27^th to May 8^th, the Central Bank of Argentina increased its interest rates by 12,75 percentage points, from 30,25% to 40%, to avoid a currency crisis. “The Argentinian government had a very gradualist approach to its adjustment program while markets were demanding a much faster pace given inflation and inflation expectations as well as fiscal and current account deficits remained high. On top of that the central bank decided to cut rates which wasn’t prudent. The fiscal and current account deficit were running high, the currency still looked overvalued on a real effective exchange rate basis and the inflation was still running well above its target. I believe the investors needed to see a stronger policy response by both the central bank and the fiscal authorities, and a commitment maybe on more medium term to the fiscal consolidation. A fiscal plan to adjust the currency letting it to get closer to fair value and a long term central bank commitment into eventually bringing down inflation. In the 1990s you would not see such a quick policy response to market transaction, but the policy makers are increasingly obeying to market conditions and what it may mean for the financial stability risk within the country. They not only tried to manage the currency by letting it depreciate, getting it closer to its fair value just using some of the reserves, they really hiked up rates too. The Finance Ministry came out and declared that they will stay on a financial consolidation path and President Macri announced he had asked the IMF for a credit line. We think it was really important, because it will anchor policy making going forward and it will also be a source of liquidity for the government,” she explains.

In the frontier market space, they like Ghana, a sub-Saharan economy rather diversified in its revenues sources: a third of its dollars and export revenues come from oil, a third from cocoa, and another third from gold. For the last year and a half, Ghana has a new government in place that is very private sector oriented and very focused on macroeconomic stabilization. Both the Finance Ministry and the Deputy Finance Ministry come from the private sector. Something that is very important as they want to privatize a larger part of the economy. “The central bank has been very focused on bringing down inflation and stability to the currency, therefore we like both the local bond market and the external debt in Ghana. The country has a very vibrant democracy, during the last two election cycles, the two parties that have been in place competed very aggressively. As a collateral damage of this competition, they have spent a lot of money right before the election to gain more weight. These large expenditures had haunted Ghana a few years back. They went through a crisis and enacted an IMF program. But now, this new government has elections coming up again in 2020. I believe they will be embedding some reforms, enacting a fiscal consolidation program and a macroeconomic stabilization program. We think this is going to be a better government in place and that they will not make the same mistake that the previous government did, but again, time will tell.”

Oil prices stabilizing

Damani likes to say that Emerging Markets are not a monolithic asset class. There is a huge diversity of countries and credits, some are oil exporters, and some are oil importers, therefore, oil can be a double-edged sword. “The exporting countries and the credits that are linked to the commodity will be benefited from the cycle. A lot of these companies and countries have adjusted their fiscal balances to a lower oil price and now they are going to see an increased windfall. We are hoping that countries use this windfall again as buffers for bad times, which in many EM economies is something commonly seen. We are hoping that policy makers have learnt and have created those local buffers. But for the oil importers, the increase in oil price is only a challenge because it negatively affects into their current account deficits. And then, just generally, oil price can directly affect inflation. In most emerging economies, inflation is not as much of a problem. In an aggregate level, inflation has continued to come down in the end, so there is some buffer here. But there are clear exceptions, and Turkey is one of them. As an oil importer, Turkey has not managed inflation correctly and it is very exposed to external financing. It draws a large current account deficit and it never benefited when oil prices went down because it did not enact the measures that were needed in place, and now is suffering. Argentina and Turkey can be contrasted in terms of their policy response. The markets are still looking for a response from the Turkish Central Bank, which according to the perception of the market, lacks the independence to be able to hike policy rates that could allow the currency to stabilize and to eventually bring inflation down. Turkey is going into an electoral cycle in June, even with a consistent deterioration happening, they have always managed their fiscal policy somewhat better. But, we have started to see signs that the fiscal stances are also deteriorating. Going forward, that gives us a bit more caution on the taking”.

Elections in Mexico

This year, Brazil and Mexico, the two biggest economies in Latin America will have presidential elections, and TIAA Investments’ Emerging Market Debt team will be very focused on them. These elections will determine what will happen with the reform path for these economies. “Currently Lopez Obrador (Andres Manuel Lopez Obrador, also known as AMLO), who is the left-wing candidate, is in the front running seat, but his disapproval is still rather high and there are still many undecided voters. Given that the election only has one round and not two, it can go both ways. The positive of only having a single round is that the third candidate which is the current party’s candidate, Meade, will be disregarded. At some point these voters are going to have to decide between Anaya and Lopez Obrador. They will have to decide where do they want to cast their votes, and most likely in terms of policy making, the rule should be expected to go to Anaya. AMLO has been doing a good job courting the investors and suggesting that nothing too dramatic will happen, but we do remain cautious because he has pledged to review energy contracts awarded since the energy reform was implemented by the current administration and has proposed to discard the Mexico City airport project, although the project is far along in the process. But, going back to the institutional framework of Mexico, it is fairly robust. Banxico is one of the most orthodox central banks, and we think they would be able to manage the situation well. The institutional framework will get tested if AMLO comes to power, but he is not going to be able to do a lot of the things he is talking about, he could be restrained both by the institutional framework and the markets. Investors may expect volatility going into the elections, but also the peso, the M-bono and the local curve is pricing in a risk premium for an AMLO victory, because the base case for everyone is currently that AMLO is going to win. The hard currency and the sovereign debt is not placing in any risk premium for the AMLO victory, and that is maybe where we may see more volatility. The peso is going to be affected, as currencies react the fastest, we should see more volatility here also, but I would not be surprised if that time is thought as a buying opportunity by most investors given how high the nominal and real rates are in Mexico. Some of the Mexican corporates, including Pemex, trade at decent risk premium over the Mexican curve.”

The contagion effect in Emerging Markets

The Emerging Markets asset class has matured over time. In the 1990s the contagion effect used to be much wider spread. Now, the contagion is increasingly limited to the country or its neighboring trade partners. Again, Damani explains that the cases of Argentina and Turkey are more home-grown problems, where monetary and fiscal policy had to be addressed. “Is a wakeup call for some of Emerging Markets policy makers that were in the same situation. Liquidity is tightening in the markets and the dollar is strengthening, this is something to be aware of and mindful, policy markers need to stand to their reform agenda and need to build buffers to protect the economy from both endogenous and exogenous shocks. EM debt came in the crosshairs of this recent volatility, but I would say it has less to do with what is happening in Argentina and Turkey. Certainly, it creates a higher noise factor and creates a little bit of panic, where people start saying we are back to the Mexican peso or Russian rubble crisis, but we are not. EM debt markets have really evolved. There is an increase in volatility and there would be some damage done. When the tide washes out, credits with good fundamentals and sovereigns with a good macroeconomic stability will be a good opportunity for investors, with spreads that have widened by 70 to 80 basis points and currencies that weaken versus the dollar. Selection will be very important, the big beta trade that occurred in 2016 and 2017 is over, it is increasingly about picking the right credits,” she concludes.

Es poco probable que vuelvan pronto esos meses de volatilidad históricamente baja