How are the options available to savers who have grown up with uncertainty and high inflation

Mutual funds (FCIs) have become an important tool when it comes to protecting and/or enhancing savings, in the context of rising inflation, expectations of devaluation, and high uncertainty, both domestically and internationally. And in that context, going back to basics and seeing the ABC of funds can be interesting. What are your advantages and disadvantages? What types of funds are there? And most importantly, how to determine the most appropriate strategy according to each profile and/or objective? Technically, funds are a financial instrument that allows a group of people, with similar investment goals and risks, to invest in the market, delegating portfolio management to appropriate professionals.

Small amounts of entry and instant liquidity

Among the advantages of these investment tools is the fact that they are easy to access and operate. In general, the minimum amount to be placed is very low, although the recommendation is that, initially, it should not be less than $1,000. Access to the fund allows you not only to diversify your portfolio within the same realm of assets (for example, fixed income), but also to invest in combined strategies. No less important, decisions are delegated to professionals in this field. On the other hand, the liquidity is practically instant. Refund terms (allowing the return of pesos or dollars at your disposal) can be immediate or between 48 and 72 hours, in most cases. These data are included in each box.

From Money Market to Variable Income: What’s Included in the Options List

The FCI offer is very wide. The most popular category is money marketsto put the short-term peso; They have instant liquidity and invest in prepaid accounts, fixed terms or guarantees. For higher returns, RF T + 1 funds, in pesos and 24 hour redemption, reduce liquidity and combine market risk, with very short-term bonds or bonds. For moderate profiles, hedge funds against inflation (CER) and exchange rate changes (DL) are a great alternative. There are also stock options, with exposure to local and international companies. and mixed income and total funds returns. the previous balance between fixed and variable income instruments; The latter allows for broad discretion to put strategy together.

Keep reading the story

Things to consider before deciding where to spend your savings

When choosing there are some aspects to consider. First, the composition of the fund, to determine if it is similar to the goal and to indicate the risk that someone is willing to take on. Equity is a piece of information relevant to understanding the “depth” of the fund in terms of liquidity and ability to respond to any eventuality. In addition, a fund’s historical performance is a rough estimate of how “successful or efficient” it will be in achieving its objective (although this does not mean that it will anticipate future behavior). Portfolio composition, volatility and duration should be added to the analysis. The higher the volatility and the average life of the position, the higher the risk. The personality of the official, his position in the industry, and whether he is a bank or a standalone is another piece of information to look at.

What has happened in the past few months with the amount of money managed

Despite the increased volatility, the FCI industry has continued to move forward. In the year, his total wealth amounted to more than 1.3 trillion dollars, and he reached a record level of 4.9 trillion dollars in assets under management (a jump of 37%). What can not be avoided is the reshaping of the business in recent months. Today more than 50% of the money markets, given the search for sanctuary in the immediate liquidity options. These funds accounted for more than $250 billion a year, or 95% of the total inflow into the industry. CER’s money lost nearly $45 billion, after setting a record for net subscriptions in the first half of the year. Still, the picture of returns benefits inflation-rated funds, which lead the month – and year – with an average performance of close to 40%.