At a time when economic conditions shape the fate of investments, consensus acts as an indispensable compass for investors and analysts. Currently, this compass seems to be pointing to a stabilization of interest rates by the Federal Reserve stabilization of interest rates by the Federal Reserve, indicating that we have reached the peak of this hiking cycle. This situation offers us an opportunity to capitalize on the rates available in the market before further changes occur.

Inflation, once a specter haunting the sustained growth of economies with unexpected virulence, is showing signs of slowing. This phenomenon suggests that duration risk - thethe possibility of a loss of capital in the face of rising rates - now appears more limited. While shocks are a constant in the economy, current monetary policy appears to have the strength to cushion rate fluctuations in the near future.

Despite this, credit risk still requires detailed consideration. Projections of only moderate economic growth, coupled with palpable uncertainty in corporate earnings, call for a cautious stance. With risk-free interest rates reaching highs not seen in the last fifteen years, it is prudent to avoid exposure to low-rated companies. avoid exposure to low-rated companies and opt for a diversified portfolio of Investment Grade bonds and U.S. Treasuries.

In the fixed income investment arena, it is In the fixed-income investment arena, it is noted that direct investment in corporate bonds requires constant monitoring and significant investment to achieve appropriate diversification. Mutual funds, on the other hand, solve the diversification problem mutual funds solve the diversification problem, but add the complexity of constant capital flow, which can affect returns due to reinvestment.which can affect performance due to reinvestment of maturities.

Within this framework, fixed maturity funds or ETFs emerge as a compelling option for investors seeking predictable and stable returns over time. These instruments mimic the behavior of a portfolio of bonds with specific maturities, culminating in their liquidation at maturity, thus eliminating the risk associated with reinvestment and ensuring a fixed return.

Fixed maturity funds or ETFs provide numerous advantages. They allow access to a wide range of issuers and sectors through a single transaction, which minimizes costs and maximizes efficiency. They offer transparency and liquidity similar to that of individual bonds when listed on an exchange, making them easy to buy or sell. They also offer greater flexibility, allowing investors to select from different maturities and risk levels according to their financial needs and objectives.

The iShares iBonds are representative of this solution, being the most cost-efficient option to achieve the objective of securing rates. They offer the possibility to invest in a diversified way in a set of US IG bonds with defined maturity, maintaining similar characteristics to direct bonds and with the additional option of investing through UCITS vehicles, which potentially improve the return thanks to the tax benefits according to the investor's jurisdiction.

In summary, in the current scenario where rates seem to be stabilizing, fixed maturity funds or ETFs emerge as an invaluable tool to capitalize on fixed income market opportunities, fixed maturity funds or ETFs are emerging as an invaluable tool for capitalizing on fixed income market opportunities.. They bring together, on the one hand, the strength and yield of bonds, and on the other, the diversification and liquidity of mutual funds, thus emerging as an outstanding option for qualified investors in search of regular and predictable income.

Family Office Team