Invest in ETFs: which are the indexes that yielded the most in the last year

ETFs can be purchased with pesos and are backed by assets listed in dollars

Starting this Tuesday, the new ETF-backed Cedears (Argentine Deposit Certificates) began trading on the Buenos Aires Stock Exchange. These instruments, widely distributed in the world’s main markets, allow local investors to acquire different types of assets or replicate indices from different sectors and regions.

Its operation is the same as that of shares, that is, they can be bought and sold throughout a wheel at the price existing at any time. They are an intermediate instrument between traditional Mutual Funds (FCI) and shares.

ETFs (Exchange Trade Funds) are investment funds that have the peculiarity of being listed on the Stock Exchange.

ETFs (Exchange Traded Fund), are investment funds that are listed on financial markets, and are made up of a basket of instruments that generally replicate indices or other assets, delimited by sectors, regions, currencies, commodities, and so on.

The ETF Cedears that can already be traded on ByMA (Bolsas y Mercados Argentinos) are the SPDR S&P 500 (SPY), Invesco NASDAQ 100 (QQQ), IShares Trust Russell 2000 (IWM), IShares MSCI Emerging Market (EEM), The Select Sector Financial (XLF), Cef Select Sector SPDR Energy (XLE), SPDR Dow Jones Industrial (DIA), IShares MSCI Brazil Cap (EWZ), and ARK Innovation (ARKK).

Through resolution No. 21577, the CNV authorized the issuance in the local Ceder market backed by nine ETFs

“The importance of this announcement by the National Securities Commission (CNV) lies in the fact that it is the first time that Cedear will be able to operate with this feature, which will allow the diversification menu to be expanded by being able to access, among other things , to the main Wall Street indices”, highlighted the experts of Invest Online.

How much did ETFs perform?

Among the new Cedear that have been authorized by the CNV are going to replicate the ETFs, these were their returns in 20201:

1°) Energy Select Sector SPDR Fund (XLE) (+53,3%)

2°) Financial Select Sector SPDR Fund (XLF) (+34,8%)

3°) SPDR S&500 ETF Trust (SPY) (+28,7%)

4°) Invesco NASDAQ 100 ETF (QQQ) (+27,6%)

5°) ARK Innovation ETF Equity (ARKK) (+23,4%)

6°) SPDR Dow Jones Industrial Average ETF Trust (DIA) (+20,7%)

7°) iShares MSCI Brazil ETF (EWZ) (+15,3%)

8 °) iShares Russell 2000 ETF (IWM) (+ 14.4%)

9°) iShares MSCI Emerging Markets ETF (EEM) (-3,9%)

Except for the ARKK, EWZ and EEM, in all cases these ETFs outperformed the S&P Merval in dollars (“liquid counted”) last year (15.5%).

Investor Global analysts contributed that “an ETF is an investment fund that seeks to replicate the behavior of some underlying asset and in which you can invest like any other stock. This distinction is key: many investment funds are not available to all investors, as their managers require very high minimum amounts to manage”.

“These are made up of a group of investors who contribute capital that is listed on the Stock Exchange and that can be bought or sold as if it were a common share. The possibility of trading on the stock market with an ETF is what differentiates them from mutual funds, which are also made up of several investors”, they added.

Among the main advantages of ETFs we can highlight:

1) They allow the acquisition of a basket of assets with just one transaction, being able to diversify the portfolio with a very low amount.

2) They allow exposure to an index, a sector, countries or regions.

3) They allow you to choose different asset profiles, such as bonds, stocks, currencies or commodities.

“When investors want to access certain assets but the operation to do so is cumbersome or expensive, they can buy an ETF that replicates that asset and thus have a position in it. This investment vehicle opens up endless opportunities for investors as they can position themselves in an index, in commodities, in a basket of currencies or in an industry in a practical way and at low cost”, contributed the experts from Rava Bursátil.

Except for the ARKK, EWZ and EEM, in all cases the ETFs available on the local Stock Exchange obtained returns above the Merval in 2021 (+15.5% in dollars)

“To put into perspective the importance of this resolution, in recent years, an investor who was exposed only to Argentine assets lost 61% in dollars -observing the S&P Merval measured in ‘cash with liquidation’-, while, if there were If he had been able to invest in the selectives of the United States, he would have obtained a return in dollars of 113% by investing in the S&P 500, 235% in the Nasdaq 100, and 84% in the Dow Jones 30″, they explained from Invest Online.

Many of the ETFs that Cedear now have were already made up of assets that could be accessed from Argentina. For example, companies with a high weighting in the S&P 500 of Wall Street (SPY) such as Apple, Microsoft and Amazon, already had Cedear.

However, from Inversión Online they explained that “in the case of the other ETFs they will also allow access to assets that previously had little or no exposure from Argentina. Among them we can mention three: the ARKK, which is focused on companies linked to the development of disruptive technologies; the IWM which focuses on small capitalization companies such as AMC, Synaptics or Lattice; and the EEM which aims to follow emerging markets, providing exposure to major companies from countries such as China, India, South Africa, Russia and Mexico”.

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