Chile faces historically high levels of inflationa scenario that seemed to be a thing of the past and brings new challenges for investments. FYNSA organized a webinar to analyze the inflationary context, its projections and present three investment alternatives focused on the UF.

Nathan Pincheira, chief economist of FYNSAset the context with projections regarding the evolution of inflation in the coming months.

First of all, Nathan pointed out, we must understand that the inflation we are experiencing is a global phenomenon. the inflation we are experiencing is a global phenomenon, due to supply-side shocks - oil and gas price hikes, disruptions in the value chain, restrictions in China due to Covid, among others - that have been mixed with the expansionary monetary and fiscal policies applied by governments to overcome the economic crises caused by the Covid crisis. which has been mixed with the expansive monetary and fiscal policies applied by governments to overcome the economic crises caused by the pandemic.

Unlike other recent inflationary events, such as that of 2008such as that of 2008, today we are facing a more persistent phenomenon. In the case of Chile, although the increase in prices is centered in the most volatile segments -food and transportation- we cannot ignore the persistence in the rise of prices of services. we cannot ignore the persistence of rising prices in services.

What do we see for inflation in the medium term? FYNSA's projections point to year-on-year inflation of 13.5% in August, 12.3% through December, 7.3% within twelve months and 3.8% by the end of 2023. "Let the numbers not fool us," Nathan pointed out. "The 3.8% by the end of 2023 is on top of the 12.3% we are projecting for 2022, it is inflation on inflation. Inflation is going to be high in 2023; we are still exposed to things we can't control."

In this scenario, UF investments become important. FYNSA has three strategieswhich are materialized in three products that were explained in the webinar.

The first is FYNSA Debt Chile. What is it about? It's a callable fund that invests in debt instruments, mainly in Chile (mainly in bank bonds and time deposits), said Gabriel Méndez, Portfolio Manager of Local Fixed Income. It has a duration of 16 years and presents an attractive risk-return ratio, with an average risk of AA+ for the instruments that make up the portfolio. 98% of the portfolio is in UF instruments and 2% in pesos. One of its characteristics is its agile exposure to the UF, as the portfolio has derivative instruments that provide flexibility and allow it to act quickly if it is necessary to reduce exposure to the UF. The yield to maturity (YTM)or yield to maturity per year of duration is 6.4%, a higher return than that of the money market funds taken as a benchmark.

The second product is the Private Fixed Income II Fund, focused on a private debt strategy through real estate assets. real estate assets assets (mainly mortgage mutuals) and credit insurance policies, explains Cristián Rodríguez. Cristián Rodríguez, FYNSA's Private Debt Manager.Its characteristics? It is a diversified diversified fund, with more than 80 tickets, with an average ticket close to 20,000 UF and an atomized portfolio, which reduces riskRodriguez points out. It has a low correlation to market variations, with a fixed rate for the entire duration of the coupon. The coupon duration of 0.88 allows diversification, mitigates the effects of rate variations and has little correlation with other economic swings. The Fund has had a return of 13.58% YTM, with over 67% of coupons current.

The third product is the Fondo Deuda Inmobiliaria I, a 30-month non-callable UF fund, explains Martín León, assistant manager of International Funds. It is made up of instruments comprised of real estate collateral or backed by real estate assets. It has solid guarantees, as it is focused on preferred equity or lease-back transactions.. It has 14 operations in its portfolio, geographically diversified in different regions of Chile. The portfolio is selected after analysis by a specialized team of appraisers, lawyers and other experts..

You can watch the full webinar HERE