TIPS -which are guarantees or funds that are indexed to US inflation- are also positioned as an opportunity. In his participation in the Annual Summit of Indices and ETFs in Mexico, organized by S&P Dow Jones Indices and Grupo BMV, Juan Hernández, General Director for Latin America of Vanguard, indicated that “short-term TIPS, less than five years, are They behave very well in the face of inflation.
In Mexico, this year Blackrock listed the iShares TIPS Bond ETF “which are the real rate ETFs of the United States, they are a bit similar to the Udibonos of Mexico, and with these environments of inflationary surprises and inflations that seem to be persistently higher generate a benefit in your portfolio”, said Christian Constandse, iShares specialist at BlackRock Mexico, during his participation in the Annual Summit of Indices and ETFs in Mexico.
Variable income, that is, shares, can also be an asset to cover inflation, although thought of more in the long term, because “companies can adapt to prices, increase dividends, etc. And within that (variable income), we feel that high-dividend companies are a good option,” commented Hernandez.
Not only can inflation be taken advantage of, but also the rise in central bank rates, here government debt instruments become a great opportunity, since the more interest rates rise, the better yields they will have, with the added bonus of These instruments usually have a very low level of risk.
In Mexico there are ETFs that follow the movement of government bonds, both from Mexico and the United States, among which are: the ETF Vanguard Short-Term Treasury, which replicates the Bloomberg US Treasury 1-3 Year Bond Index and measures the investment return on US Treasury bonds with maturities between 1 and 3 years. And the iShares S&P/VALMER Mexico, which follows the movement of Mexican government bonds between 1 and 5 years.
The options to invest are varied, the most important thing is to analyze them “define a strategy and put part of our capital to work,” says Clavé.