Local assets offer an attractive risk-return ratio.
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Local Macro Scenario
For 2023, GDP is projected to contract by -1% with a downward bias.
Confidence indices continue to reflect a pessimistic view of the future of the economy.
Inflation base scenario at year-end 2023: 4.7% YoY
Expectation of TPM at 11.25% is maintained for a long period. Change in policy stance could be delayed until late 2Q-23 or early 3Q-23.
Local uncertainty moderates and approaches pre-2019 levels. However, 2023 will continue to be marked by ongoing reform processes.
Local Equities
IPSA 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%
Our projections call for the IPSA to rise to around 6,500 points in 12 months, which is equivalent to an increase of ~25% from current levels.
Low representation of the asset class in the portfolios of local and international investors.
Sectors to overweight: Commodities, Telecom, Consumer.
Our Fynsa Total Return mutual fund offers a portfolio with high conviction based on the concentration of its positions and its exposure to sectors, favoring companies with attractive valuations, growth catalysts and attractive dividends. The fund has consistently outperformed the IPSA and has positioned itself competitively against a demanding sample of equity funds, ranking in the top quartile since its inception.
Local Fixed Income
Maintain positioning in the short end of the curve. Neutrality in terms of UF exposure.
Over the last 12 months, the short end of the curve has been steeply upward, giving room for attractive risk/return positioning and long rates at lower levels.
Overweight corporate issuers with high risk ratings (AAA; AA).
Corporate spreads widen at the margin, given higher growth risks, but remain below pre-pandemic levels.
The more persistent inflation in 2022, along with the de-anchoring of expectations, led the Central Bank to raise the TPMR to 11.25% levels, which it maintained in its last RPM and will likely maintain for the first part of 2023, pending more consistent downward inflation data. According to FWD, inflation should decline in the following months, falling from 4% by March 2024.
Improved dynamics of institutional flows.
Our Fynsa Deuda Chile mutual fund offers an attractive risk/return ratio, with a YTM of UF+5.1%, with only 1.8 years of duration. Flexible exposure to the UF, currently close to 75%. Exposure close to 90% in bank bonds, DAP and treasury, obtaining a favorable liquidity position. Conservative portfolio in terms of credit risk, with an average rating of AA+.
Exchange rate
The fall in the exchange rate is already beginning to overcome the fundamentals.
The global dollar trend has been consolidating downward in recent months, given the outlook for lower inflation and lower interest rates in the U.S. While we acknowledge the progress in inflation, it is still insufficient to keep the FED from raising interest rates further, so after a 12% drop from the October highs, the room for further dollar depreciation is beginning to narrow.
Locally, the exchange rate is trading $30 below the levels we consider fair value for the short term, and real exchange rate levels no longer point to such an "undervalued" currency.
The area around $800 seems attractive to us to resume dollar purchases.
