A year that puts portfolios to the test 

2026 has been a challenging year for local investors. Economic activity has been in negative territory for four consecutive months—the worst streak since 2020—and inflation exceeded 4% annually in April. Oil prices reached nearly $107 per barrel before correcting sharply. The IPSA, despite gaining ground over the year, has alternated between positive months and declines of up to -4.75% in February and -2.18% in March. At the same time, the Federal Reserve (Fed) has kept rates unchanged for the fourth consecutive meeting, and the Central Bank of Chile has ruled out rate cuts in light of persistent inflation. 

In that context, the key question isn't whether the markets will go up or down. It is: How resilient is my portfolio really when things get tough? 

The myth of the conservative who just waits 

There is a widespread belief that a conservative investment strategy means putting all your money into fixed-income securities, waiting for interest rates to fall, and protecting your portfolio without taking much action. The problem is that this approach concentrates risk in a single variable: the trajectory of interest rates. When that variable takes an unexpected turn—as has happened this year—the strategy has no buffer. 

A truly conservative portfolio isn't one that avoids all risk, but rather one that doesn't concentrate all its risk in a single source of return. The difference is subtle, but in practice, it's what sets apart a portfolio that withstands market fluctuations from one that simply waits. 

How many drivers are in your portfolio? 

The modern approach to building a conservative portfolio involves combining assets that do not necessarily move in the same direction: 

• UF-indexed fixed income. It provides direct protection against inflation. When the CPI surprises on the upside—as happened in Chile, where inflation reached 4% annually—this component benefits and offsets some of the damage that inflation causes to nominal assets.
• Total return strategies. These aim to generate returns regardless of market direction. They do not track the IPSA or bonds: they seek to capture specific opportunities with low correlation to the rest of the portfolio. In months when the market declines, this component can continue to contribute.
• Alternative assets. Private debt, invoices, and real estate investments operate on a different logic: their returns depend on the real flow of the economy, not on the daily valuation of financial assets. This makes them a natural buffer during periods of heightened volatility.
• An exposure limited to equities. It allows investors to participate in market recoveries without becoming structurally dependent on them. The focus is not on capturing the full upside, but rather on not being left out when the cycle improves. 

What practice shows 

This year has served as a good test case for seeing how this investment strategy works. In the months when the IPSA fell most sharply, portfolios built on this strategy—with a heavy weighting in UF-denominated fixed income, total return, and alternative investments—managed to remain consistently in positive territory. 

Not because they “outperformed” in absolute returns, but because no single component was weak enough to drag down the overall performance. The inflation component of the UF offset the weakness in equities; alternative investments continued to generate cash flow; and total return strategies contributed without relying on the market. Each driver played its part. 

Looking ahead

The uncertainty isn't going to go away anytime soon. The Fed hasn't given any clear indication of when it will adjust its interest rate, domestic inflation remains above the 3% target, and economic activity hasn't found a solid floor. In this scenario, the quality of the architecture matters more than the timing. 

The question worth asking isn't "What will perform best this year?" The right question is "How many pillars does my portfolio have if one of them fails?" 

A well-constructed portfolio doesn't need to predict the future. It just needs to be prepared for a variety of outcomes.

Juan Manuel Alessandrini

Senior Analyst, International Funds, Fynsa AGF