More conservative internationally, more pro-risk locally.
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International assets
We continue to recommend overweighting less rate-sensitive assets such as cash, value sectors, international equities and real assets.
Cash: we change our conviction from moderate to high
Given the level of rates at the shorter end of the curve, we see U.S. Treasury bonds between 1 and 6 months as more attractive.
Fixed income: we continue to maintain our high conviction in this asset.
(+) Mainly what we see is a relative attractiveness with respect to equity (yield spread favorable to fixed income).
(+) In addition to attractive rate levels that can be found in papers of good credit quality (IG YTM ~ 5.5%).
(-) Although we see rate volatility remaining high for some time to come until there is consensus on a growth and inflation scenario.
(+) The fixed income allocation is mainly composed of US Treasuries and US IG Credit.
Regarding the duration of the portfolio, we have been moving up to a more neutral duration close to 4 years. The main trigger to lengthen it is to find a ceiling in the rate, which today we believe is between 4.5% and 5.0%.
EquitiesWe maintain our low conviction with an underweight, although at current levels (around 4,000 points) we see the S&P 500 close to its Fair Value. Fair Value
(-) There is little incentive to take risk in equities (yield spread favorable to fixed income).
(-) Equity risk premium at low levels for the current context (S&P 500 case).
(+) We maintain a more constructive view on countries outside the United States, especially China, through Series A shares.
(+) In terms of investment styles, we maintain a value bias in most regions, with the exception of Japan and Emerging Markets.
Alternatives: we continue with a neutral position
Private debt: we see opportunities in this vintage on the distressed debt side, favorable conditions for underwriters rather than borrowers.
Real estate: this is the market that we have seen more complicated, due to the fact that cap rates in general have not adjusted or have yet to adjust, we see the single family or multi-family residential segment as more resilient and attractive within the US real estate universe.
Private equity, we see opportunities in secondary fund strategies that are able to buy at attractive discounts to other LPs.that are able to buy at attractive discounts from other LPs.
Local Assets
They offer an attractive risk-return ratio, given the ongoing macro rebalancing and the moderation of political-institutional risks.
Cash: Attractive rates, but we see more opportunities in fixed income and equities.
Fixed incomeFixed income: maintain positioning in the short end of the curve. Neutrality in terms of UF exposure.
(+) More attractive rates after recent adjustments.
(+) In the last 12m the short end of the curve has been steeply upward, giving room for attractive risk/return positioning and long rates at lower levels.
(-) Corporate spreads increase at the margin, given the higher growth risks, but remain below pre-pandemic levels.
EquitiesIPSA offers an attractive risk/return ratio.
One of the few global markets with the possibility of expanding multiples. High dividend yield. CLP appreciation potential in line with DXY depreciation and rising commodity prices.
(+) IPSA offers a substantial discount relative to its peers and its own history.
(+) Attractive dividend yield 8,5%.
(-) Earnings revised downward for 2023.
DollarExchange rate begins to adjust to its fundamentals.
(+) Attractive carry.
(+) Better terms of trade.
(-) In real terms, the peso no longer appears to be undervalued.
We find the $780 - $800 area attractive to resume dollar purchases.
