Sunday, February 5

New international investment alternatives in the local market


Beyond this, the Market received refreshing news from the regulator. And it is that the National Securities Commission (CNV) has decided to authorize the listing of foreign funds in the local market. It will no longer be necessary to have dollars abroad to invest in the main ETFs (Exchange Traded Funds), they can be traded in BYMA through CEDEARs. Let us remember that the Argentine Certificates of Deposit are variable income instruments that are listed on the Buenos Aires Stock Exchange but represent assets that have not been publicly offered or listed on the local market.

What are the main advantages that CEDEARs of ETFs bring us?

Simple trading: Although it is a fund and tracks an index, it can be bought and sold like any instrument during the session.

Diversification: with a single transaction, a position can be taken in a diversified portfolio, with a specific objective and in this way favor risk reduction and reduce exposure to local risk.

Cost optimization: by being able to buy it in the local market with pesos or dollars, it reduces costs and cumbersome local funding processes abroad. Also, by encompassing an entire portfolio of them in a single asset, the transactional costs of investing individually in each one are eliminated.

Accessibility: Although abroad the minimum to invest is usually 1 ETF, the local market has established ratios that subdivide it into small parts, so that retail investors have better access.

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Coverage and variety: the underlying assets of the new CEDEARs are denominated in dollars (counted with liquidation), so they provide protection against local devaluations and allow access to products that do not exist in the local market.

Security: they are instruments operated in BYMA, regulated by the CNV and issued and guarded by Caja de Valores. They represent highly liquid foreign securities and are freely convertible.

Tax advantage: when listed on a local market with price-time priority, the result at the time of disposal would be exempt from Income Tax (but not the amounts collected as dividends). On the other hand, if it is taxed for personal property because the underlying is a foreign asset.

Close to 65% of the volume traded in equities in the local market is on foreign assets, through CEDEARs. Based on these incorporations, it is expected that local companies will continue to give up space, in an environment of high volatility and low liquidity as a result of economic instability. However, all this volume can be channeled locally and thus strengthen the Argentine ecosystem, benefiting not only the public but also Market Agents so that they can grow and continue developing to add competitiveness.

Although for now there are only 9 CEDEARs on ETFs, it is expected that during 2022 the variety of instruments included in the list will continue to expand.

What is the complete list officially reported by BYMA?

SPDR S&P 500 (SPY). It replicates the S&P 500 index and is made up of a portfolio that represents the 500 stocks with the largest capitalization in the US.

Invesco NASDAQ 100 (QQQ). It tracks the Nasdaq 100 index and includes 100 of the largest non-financial companies by market capitalization listed on Nasdaq.

IShares Trust Russell 2000 (IWM). Replicates the Russell 2000 Index Fund. Holds US small-cap stocks.

IShares MSCI Emerging Market (EEM). It tracks the performance of the MSCI TR Emerging Markets Index and holds large and mid-cap emerging market stocks.

The Select Sector Financial (XLF). Represents the performance of The Financial Select Sector Index. Includes financial services companies whose businesses range from investment management to commercial and business banking.

Cef Select Sector SPDR Energy (XLE). Represents the performance of The Energy Select Sector Index. It includes large-cap US energy stocks and invests in companies that develop and produce crude oil and natural gas, provide drilling and other related services.

SPDR Dow Jones Industrial (DIA). It replicates the Dow Jones Industrial Average index. It holds the 30 large-cap US stocks contained in the index.

IShares MSCI Brazil Cap (EWZ). It seeks to match its investment results with the performance of the MSCI Brazil 25/50 Index. It invests in large and mid-cap companies in Brazil that represent 85% of the Brazilian stock market.

ARK Innovation (ARKK). The ARKK ETF is actively managed and seeks long-term capital growth by investing in equity securities of companies with a focus on disruptive innovation.

RATIOS of the ETF CEDEARs (number of CEDEARs are necessary to form 1 ETF).

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Commercial Manager of PPI.



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