In the market the possibility of the Government lowering monetary policy rates again resonates for the eighth time in the face of a possible excellent inflation data for May close to 5%.
For this reason, Capitalizable Treasury Bills (LECAP) become the preferred option for financial analysts to protect the pesos against the unattractiveness of the fixed term: the bonds start at 3.2% monthly effective rate (TEM) on 2.6% of the banking instrument.
The LECAPs have the advantage of granting a fixed rate within a generally short period Therefore, they are frequently used by investors looking for a predictable return with low risk.
Experts also suggest them for cases in which need to stay in local currencywith a greater potential for profits in relation to those granted by placing money in virtual wallets.
LECAP: how economic measures influence
The economic measures aligned with cleaning up the Central Bank’s balance sheet included a sharp decline in rates that pays banks for their loans up to 40% annual nominal ratewho in turn offer up to 32% TNA in fixed terms.
Juan Alra, Portfolio Manager at Southern Trust, tells iProUP that “one of the most attractive reasons for these letters is linked to surpassing the performance of immediate liquidity or money market funds (such as Mercado Pago) that yield 35% TNA and will probably continue to drop up to 30%, while LECAP returns around 40%.”
The expert adds that, little by little, the Government is creating its expected inflation curve to give greater credibility to the “chainsaw” plan and fiscal deficit 0, simultaneously transferring resources from the BCRA to the Treasury in order to continue cleaning it up.
Mauro Carrizo, Financial Advisor at Cocos Capital, highlights to iProUP that “the LECAPs are also higher in yields than those offered by the BADLAR rate – that agreed for the payment of fixed terms exceeding one million pesos for 30 days – and are in 32% zone”.
LECAPs: what to take into account before investing
In this context of structural change in the macroeconomy, Carrizo emphasizes that it must be taken into account that “these assets have sovereign riskwhich would be a weak point, but for the rate attractiveness makes sense to change position“.
“With regard to the world of short-term pesos, they look like the best investment alternative, in a context with limited volatility of all nominal variables,” he completes.
For his part, finance specialist Alejo Sánchez tells iProUP that “in contexts of economic uncertainty, there is a risk that the ruling party will face difficulties in refinancing its debt, which may affect the payment of interest and capital.”
Furthermore, in high inflation contexts, the fixed income offered by LECAP may not be sufficient to overcome the loss of purchasing power, resulting in a negative real return.
LECAPs perform better than fixed-term deposits and digital wallets
“This, in any case, I already We are insured with a fixed term, which for years has not even been able to keep pace with inflation.“, reflects Sánchez, who adds that “in the event of a rise in the dollar, as has happened in recent days, we would be completely exposed.”
LECAPs: how to invest in these instruments
The current administration offers a wide variety of LECAP with different terms: you can invest up to 25, 42, 67 days, or longer term, with maturities of 102 days. Those marketed this year are:
- S14J4: 3.42% TEM, due July 1
- S01L4: 3.60% (July 1)
- S26L4: 3.62% (July 26)
- S30G4: 3.64% (August 30)
- S14O4: 3.66% (October 14)
- S29N4: 3.71% (November 29)
Alra warns that “at end of the chosen period, the payment will be the one pre-agreed in the result of the tender. However, these letters may suffer daily variations in the secondary market which may affect their performance if sold before the finish date. If you keep them until the end, you will know exactly how much you will earn.”
To invest in LECAP you require:
- Have a client account at a financial broker that allows the operation of investment instruments to be carried out, is regulated by the CNV. For example: Banza, Ualá, PPI, Bull Markets, IOL, Sailing Inversiones
- Fund the account with pesos to be able to operate
It is also recommended to have a Financial Advisor to consult which are the most attractive letters in terms of return and plan the investment based on the need for liquidity that every saver has.
