Opinion archivos - Page 21 of 79

High Yield: The End Of The American Dream?

High yield: ¿el fin del sueño americano? — Wikimedia CommonsCourtesy photo. High Yield: The End Of The American Dream?

Traditional fixed income investors do not usually like interest rate hikes. As rates go up, the prices of their bonds go down and they reap negative returns in their portfolios. This is where the poorly advised investor learns that fixed income is far from fixed. Only those who maintained liquidity in a large portion of their portfolios will welcome the new opportunities arising from investing at higher rates. But is this anxiety surrounding the rate hikes shared across all asset classes in fixed income? In the case of high yield bonds the higher rates could be a positive thing (if the increases reflect an expanding economy) or a negative thing (if there is a fear that these rate hikes may end up causing a recession).

To date, despite episodes of volatility in the markets, high yield has generally benefitted from the strength of the US economy, the growth in corporate earnings and the low default rate. In spite of the downturn that we have seen so far in October, the high yield indices are still in the black since the beginning of the year, in contrast to the losses seen in the investment grade indices. Without indulging in a simplified generalisation that blurs the distinctions between the many subgroups and components that make up the high yield class, of all the sectors with a weighting of over 3% in the benchmarks, only Homebuilders are wider (note that at the beginning of the year, it was trading very tight).

The high internal cash-flow generation within this asset class has brought a slower rate of new issue origination, which has also been a determining factor in the good performance of high yield. Most new issues this year have been assigned to refinancing the existing debt. There has also been an improvement in credit ratings for new issues, leaning more towards BB bonds and with fewer CCC issues. Credit fundamentals remain strong. Rating upgrades surpass downgrades in the highest ratio since 2011. The rate of defaults within the high yield class is around 2%, compared with a historical average of 5%.

Furthermore, we must not underestimate the increasingly frequent demand from investors who were traditionally focused only on investment grade bonds, such as pension funds or wealth managers, who are incorporating BB tier issues into their portfolios. These investors are not merely “opportunistic tourists”, but rather they are investing in a systematic manner with a view to improving the diversification of their portfolios.

The NAFTA is no longer one of the risks weighing down this asset class. We are left with China, oil, a possible acceleration in inflation and the deficits. So, does this mean the end of the American dream enjoyed by high yield? Historically speaking, high yield bonds have had a negative correlation with Treasury bonds. History also teaches us that credit spreads can remain below average for long periods of time, particularly during periods of positive economic growth and low default rates.

Given the current outlook, in the short term, we do not believe the economic situation will take a turn for the worse towards a recession, which would create a negative credit environment. Although the credit spreads for high yield indices are at low levels from a historical perspective and, in our opinion, there is limited potential for capital appreciation, the coupon offered is sufficiently attractive relative to other assets to justify waiting patiently with a portion of the portfolio invested in high yield bonds. Of course, we cannot rule out a widening of spreads in the short term, caused by a defensive movement and the profit taking in a volatile market if stocks sell off. But this would not be the result of panic selling due to a continuous deterioration of fundamentals.

Column by Meritxell Pons, Director of Asset Management at Beta Capital Wealth Management, Crèdit Andorrà Financial Group Research.

October Spectra: Get Out Of Equities Or Probe The Entry?

| For Gabriela Huerta | 0 Comentarios

Espectros de octubre ¿Salirse de Bolsa o tantear la entrada? — Wikimedia CommonsFoto: Federal Reserve. October Spectra: Get Out Of Equities Or Probe The Entry?

The leaps made by the stock market indices Dow Jones (DJI), S&P 500 (S&P), Nasdaq Composite (NASDAQ) and Russell 2000 (RUT) on October 15 and 16, seems more like technical reactions due their fall to the 200 day moving average (MA) than signs of recovery.

Benchmarks fell at a mean of 8.60% from their recent all-time highs (RUT, -11.26%; NASDAQ, 9.60; S&P, -6.93%; DJI, 6.62%). RUT continued dropping 4.7% beyond that MA, was the only index that touched and trespassed the MA 300 line and, in proportion, the third in rebound magnitude. What could we understand and wait?

It is October, guys, and you cannot get enthused. Since we have well clear the reasons for the downfall –overprices, continuing hikes of fed funds rate, uncertainty about Brexit, economic and political storm-clouds over the EU, trade menaces, etc. –, and assimilated enough that they will not be resolved neither in the short nor in the medium term, even with the palliative of quarterly reports, it is hard to accept that the increases of those days mean a quick return to historical highs. Technical indicators suggest there are room for additional downs, given the indices didn´t reach the over-sale area. Rebounds could be taken as a breath in the downfall or as a symptom of stagnation.

Judging by the cumulative returns in five, three, one year (from closing to closing of each September) and YTD, it is reckoned understandable that a profit taking, more substantial than previous ones, was intuited or drawn for months. Take a look to these rounded figures:

Historical lessons of October

MexBol IPC index flirted the threshold of 50,000 points in August and September and finally fell in this streak somewhat less than Wall Street references. Therefore, its positive reaction has been tepid, precisely up to the 200 MA line, without shaking the bearish bias. Still, it has left in two weeks half of the points it had won in four months. Needless to say, its performance has been poor: loss of 1% in one year; gain of 1% YTD.

If we review the behavior of the stock markets in others cycles of FED Funds rate increases, we would see that the pattern of the turn to the upside requires not less than a semester. On this occasion, it would be warned: as long as the results contribute and the other elements do not run aground. Of course, the pattern involves rises and relapses that, this time, if occurred, they would coincide with the crossing from and to the 300 MA, which could be bad for many but interesting for some. If we abide by technical signals, we will assume that this PM marks a harder and decisive floor for Wall Street: if reached and validated, the rebound could inject confidence; if breaks, be careful…

In any case, if the decrease becomes pronounced or laterality happens, the histories of October and the stepped rise of Fed Funds rates would allow to deflate prices and enter the market at attractive levels. Here lies the interesting thing.

Column by Arturo Rueda

Emerging Markets’ Lost (Near) Decade

| For Gabriela Huerta | 0 Comentarios

Investors may be ready to abandon emerging markets, but the potential is there for a sizeable rebound. U.S. technology is once again ascendant. Since the fall of 2016, the S&P 500 Technology Sector Index is up nearly 70%; the tech sector now accounts for more than 25% of the S&P 500 market capitalization.

Despite the strength of the recent rally, tech enthusiasts will recall a long, long period of unpopularity. After peaking in early 2000, the tech sector lost more than 80% of its value. It then took 17 years until the sector reclaimed its 2000 peak. Investors in emerging market (EM) stocks should keep that history in mind as they go through a similar, albeit less prolonged drought. The MSCI Emerging Markets Index is trading at approximately the same level as it did in early 2010.

Value, or the lack thereof, played a part

Valuations in emerging markets never approached the Olympian heights that tech stocks traded at in the late 1990s. That said, valuations have played a part in emerging markets’ struggles.

Since coming out of their own financial crisis in late 1990s, emerging market stocks have tended to trade in a well-defined range versus developed markets: a 45% discount to a 10% premium (based on price-to-book). Periods when EM stocks traded at a premium, such as late 2007 and 2010, turned out to be market tops. Interestingly, EM’s recent 20% drop was not proceeded by egregious valuations. In January, EM stocks were trading at approximately 1.9 times x book, a 23% discount to the MSCI World Index.

Another bottom?

Following the recent correction, EM stocks are trading at levels that preceded previous rebounds. EM equities are trading at roughly 1.55 times price-to-book (P/B), the lowest since late 2016 and a 35% discount to developed markets. Price-to-earnings (P/E) measures paint a similar picture. Current valuations represent a 33% discount to developed markets. Today, countries from Russia to South Korea are trading at less than 10x earnings (see Chart 1).

Enlarge

Of course, valuations are never the complete story. In the short term, they might not even be that relevant. As I discussed back in August, an EM rebound probably requires two other components: a flat-to-cheaper dollar and signs of an economic rebound. On the former, emerging markets should be getting some relief as the dollar is now down nearly 3% from its August peak.

In terms of economic growth, the picture is more mixed. In late July it briefly looked like emerging market economies were growing faster than expectations. That rebound proved fleeting. Going forward, investors should focus on China, where efforts to accelerate the economy through monetary stimulus are accelerating. Typically, these efforts start to impact the real economy with a 1-2 quarter lag.

Continuing pressure on particular EM countries–notably Turkey and Argentina–are partially responsible for recent losses. Escalating trade frictions have not helped. Still, should the dollar remain stable and China begin to accelerate, valuations suggest the potential for a sizeable rebound.

Bottom Line

For investors who have given up on emerging markets, it may be worth recalling that nine years after peaking, U.S. technology stocks were still down nearly 80%. From there the sector began a rally that has lasted more than nine years and resulted in a gain of more than 500%.

Build on Insight, by BlackRock written by Russ Koesterich, CFA, is Portfolio Manager for the BGF Global Allocation Fund.

In Latin America and Iberia, for institutional investors and financial intermediaries only (not for public distribution). This material is for educational purposes only and does not constitute investment advice or an offer or solicitation to sell or a solicitation of an offer to buy any shares of any fund or security and it is your responsibility to inform yourself of, and to observe, all applicable laws and regulations of your relevant jurisdiction. If any funds are mentioned or inferred in this material, such funds may not been registered with the securities regulators of Argentina, Brazil, Chile, Colombia, Mexico, Panama, Peru, Portugal, Spain Uruguay or any other securities regulator in any Latin American or Iberian country and thus, may not be publicly offered in any such countries. The provision of investment management and investment advisory services is a regulated activity in Mexico thus is subject to strict rules. For more information on the Investment Advisory Services offered by BlackRock Mexico please refer to the Investment Services Guide available at www.blackrock.com/mx. The securities regulators of any country within Latin America or Iberia have not confirmed the accuracy of any information contained herein. No information discussed herein can be provided to the general public in Latin America or Iberia. The contents of this material are strictly confidential and must not be passed to any third party.

Investing involves risks, including possible loss of principal.
International investing involves risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. These risks often are heightened for investments in emerging/developing markets or in concentrations of single countries.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of September 2018 and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader. Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.
©2018 BlackRock, Inc. All rights reserved. BLACKROCK is a registered trademark of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. All other marks are the property of their respective owners.
USR0918U-610540-1900137

No More Samba in Brazil

| For Fórmate a Fondo | 0 Comentarios

Se acabó la samba en Brasil — CC-BY-SA-2.0, FlickrPhoto: Nicolas de Camaret. No More Samba in Brazil

Jair Bolsonaro has come out in the lead in the Brazilian presidential elections with 46%. Looking beyond his very divisive views on certain issues in Brazilian society (status for women, LGBT), on the Paris Agreement and the corruption of previous governments, along with his aim to end Brazil’s endemic violence by allowing Brazilians to take up arms, are there any economic foundations for his likely victory? (see here the Brazilian context of these elections) This victory has very clear economic explanations. The Brazilian economy has been suffering since 2014 and the collapse in commodities prices. The recession over 2014-2015 and 2016 lasted a very long time, and was followed by a lackluster recovery, which was more of a stabilization than a real rebound. GDP in the second quarter of 2018 still fell 6% short of the 1Q 2014 figure.

This drastic situation can be attributed to two factors. The first is the country’s high dependency on commodities. Brazil enjoyed a very comfortable situation at the start of the current decade when China became its primary trading partner. Opportunities increased and commodities prices soared, so revenues were buoyant and did not encourage investment, creating a phenomenon known as Dutch disease, whereby commodities revenues were such that there was no incentive to invest in alternative businesses. But when Chinese growth began to slow and commodities prices took a nosedive, the Brazilian economy was unable to adapt, so it seized up and plunged into a severe recession.

The other factor is that Brazil devoted hefty financial resources to financing the football World Cup in 2014 and then the Olympic Games in 2016, so in a country with a massive current account deficit, this put a lot of pressure on financing. Funding for public infrastructure replaced investment in production, thereby making the country’s Dutch disease even worse.
The Brazilian population has paid a high price for the country’s brief moment of glory.

Ampliar

Were jobs and purchasing power hit?

Yes – the job market contracted and inflation stepped up, and if we look at the Markit survey indicator, employment has not returned to 2015 levels, especially in for services, while jobs have
stabilized in the manufacturing sector over the past year, albeit at a low level. So Brazilians are still paying for the recession

Ampliar

What can we expect for the Brazilian economy in the short term?

The Brazilian economy is still very shaky and the latest surveys suggest that recessionary risk remains high. More broadly speaking, the slowdown in the world economy will not help drive economic momentum, while in the commodities sector, only oil prices are on an upward trend. The new president has a tough job ahead as the country has very high expectations, but Brazil is not the US: it is no longer a powerful economy and must first rebuild, which will be a long drawn-out process. There is a risk that change will not be fast enough to keep Brazilian voters happy at a time when the authorities are also taking a tougher line to maintain law and order.

Column by Natixis IM written by Philippe Waechter

It Is Possible We See A Correction in the US Markets with Potential for Increased Volatility Globally

| For Gabriela Huerta | 0 Comentarios

U.S. equities edged higher during September while posting the best quarterly performance since the 4Q of 2013. Stocks set another record high in late September as the market brushed off the escalating trade war, the undeterred Fed’s rising interest rate policy, and contentious midterm election uncertainties. Global investors continue to be impressed by America’s low tax rate induced economic strength, corporate profit growth, and less regulation. The consumer is doing well with rising wages, lots of jobs, and a record for household net worth and confidence. The U.S. equity market remains in the global sweet spot as the bull market that started in March of 2009 has moved higher and outperformed foreign markets. In Europe markets are worried about the Brexit stalemate and the bickering ECB.

We continue to view the investment backdrop through the lens of the four Ts. The first is Tariffs and we are not overly concerned about the current situation and expect the eventual long term outcome to be accretive to U.S. GDP growth. The second T relates to the U.S. 10-year Treasury note yield which is currently around 3 percent. Are current ‘EBITDA’ less capex multiples sustainable as interest rates rise? Taxes are next. The U.S. moved to a territorial tax system from a global system for corporations, which coupled with a 21% corporate tax rate provides a magnet for business to locate here. Another plus is the 100 percent write-off of capital expenditures for both new and used equipment which drives greater capital expenditures. The fourth T is Technology which creates ‘moats’ or barriers to entry around selective service companies.

In the U.S. political catalyst arena, mid-term elections will be held on Tues Nov 6, 2018. The outcome may be unexpected, as was the case in November 2016 when financial market volatility spiked.

On the global mergers and acquisitions front, activity reached $3.3 trillion in the third quarter, an increase of 37% compared to 2017. The current wave of deal activity is global, as evidenced by cross-border M&A activity that totaled $1.3 trillion in the first nine months of 2018, making it the strongest period for cross-border deal making since 2007. Energy & Power, Healthcare and Technology have been the most active sectors through the third quarter.

There were a number of positive developments in September including:

Sky plc (SKY LN-London) shares traded higher after the auction process for the British broadcaster resulted in a bid price of £17.28 cash per share by Comcast, or about £37 billion. The auction was mandated by UK regulators after a bidding war broke out between Comcast and Disney-backed Twenty-First Century Fox after Fox launched a deal to acquire Sky for £10.75 in December 2016.
Express Scripts (ESRX-NASDAQ) shares narrowed the discount to its deal price after the Department of Justice gave the green light to its proposed merger with Cigna. The companies are still awaiting approval from several state insurance departments and expect to close the deal in the fourth quarter.
Nevsun Resources (NSU CN-Toronto), a gold and copper mining company, agreed to be acquired under improved terms from Zijin Mining Group for C$6.00 cash per share, or about C$1.8 billion. Nevsun hired bankers to sell the company after Lundin Mining launched a bid to acquire the company for C$4.75 cash per share in July 2018.

Notable transactions announced in September included:

Integrated Device Technology, Inc. (IDTI-NASDAQ), which makes semiconductors and modules used in computers, networking and personal devices, agreed to be acquired by Renesas Electronics Corp for $49 cash per share, or about $6.5 billion.
LaSalle Hotel Properties (LHO-NYSE), an upscale lodging REIT, agreed to be acquired by Pebblebrook Hotel Trust under improved terms. In May, LaSalle agreed to be acquired by Blackstone for $33.50 cash per share. Subsequently. Blackstone walked from the transaction after LaSalle declared Pebblebrook’s offer superior. Terms of the deal with Pebblebrook allow LaSalle shareholders to elect either $37.80 cash or 0.92 shares of Pebblebrook common stock, subject to proration, or about $5 billion.
Ocean Rig UDW (ORIG-NASDAQ), an international offshore drilling contractor specializing in ultra-deepwater drilling, agreed to be acquired by Transocean for $12.75 cash and 1.6128 shares of Transocean common stock per share of ORIG, or about $3 billion.

Through this backdrop we continue to evaluate the possibly for a correction in the US markets with potential for increased volatility globally as a result of much of the ongoing developments both politically and economically.

Column by Gabelli Funds, written by Michael Gabelli

To access our proprietary value investment methodology, and dedicated merger arbitrage portfolio we offer the following UCITS Funds in each discipline:

GAMCO MERGER ARBITRAGE

GAMCO Merger Arbitrage UCITS Fund, launched in October 2011, is an open-end fund incorporated in Luxembourg and compliant with UCITS regulation. The team, dedicated strategy, and record dates back to 1985. The objective of the GAMCO Merger Arbitrage Fund is to achieve long-term capital growth by investing primarily in announced equity merger and acquisition transactions while maintaining a diversified portfolio. The Fund utilizes a highly specialized investment approach designed principally to profit from the successful completion of proposed mergers, takeovers, tender offers, leveraged buyouts and other types of corporate reorganizations. Analyzes and continuously monitors each pending transaction for potential risk, including: regulatory, terms, financing, and shareholder approval.

Merger investments are a highly liquid, non-market correlated, proven and consistent alternative to traditional fixed income and equity securities. Merger returns are dependent on deal spreads. Deal spreads are a function of time, deal risk premium, and interest rates. Returns are thus correlated to interest rate changes over the medium term and not the broader equity market. The prospect of rising rates would imply higher returns on mergers as spreads widen to compensate arbitrageurs. As bond markets decline (interest rates rise), merger returns should improve as capital allocation decisions adjust to the changes in the costs of capital.

Broad Market volatility can lead to widening of spreads in merger positions, coupled with our well-researched merger portfolios, offer the potential for enhanced IRRs through dynamic position sizing. Daily price volatility fluctuations coupled with less proprietary capital (the Volcker rule) in the U.S. have contributed to improving merger spreads and thus, overall returns. Thus our fund is well positioned as a cash substitute or fixed income alternative.

Our objectives are to compound and preserve wealth over time, while remaining non-correlated to the broad global markets. We created our first dedicated merger fund 32 years ago. Since then, our merger performance has grown client assets at an annualized rate of approximately 10.7% gross and 7.6% net since 1985. Today, we manage assets on behalf of institutional and high net worth clients globally in a variety of fund structures and mandates.

Class I USD – LU0687944552
Class I EUR – LU0687944396
Class A USD – LU0687943745
Class A EUR – LU0687943661
Class R USD – LU1453360825
Class R EUR – LU1453361476

GAMCO ALL CAP VALUE

The GAMCO All Cap Value UCITS Fund launched in May, 2015 utilizes Gabelli’s its proprietary PMV with a Catalyst™ investment methodology, which has been in place since 1977. The Fund seeks absolute returns through event driven value investing. Our methodology centers around fundamental, research-driven, value based investing with a focus on asset values, cash flows and identifiable catalysts to maximize returns independent of market direction. The fund draws on the experience of its global portfolio team and 35+ value research analysts.

GAMCO is an active, bottom-up, value investor, and seeks to achieve real capital appreciation (relative to inflation) over the long term regardless of market cycles. Our value-oriented stock selection process is based on the fundamental investment principles first articulated in 1934 by Graham and Dodd, the founders of modern security analysis, and further augmented by Mario Gabelli in 1977 with his introduction of the concepts of Private Market Value (PMV) with a Catalyst™ into equity analysis. PMV with a Catalyst™ is our unique research methodology that focuses on individual stock selection by identifying firms selling below intrinsic value with a reasonable probability of realizing their PMV’s which we define as the price a strategic or financial acquirer would be willing to pay for the entire enterprise. The fundamental valuation factors utilized to evaluate securities prior to inclusion/exclusion into the portfolio, our research driven approach views fundamental analysis as a three pronged approach: free cash flow (earnings before, interest, taxes, depreciation and amortization, or EBITDA, minus the capital expenditures necessary to grow/maintain the business); earnings per share trends; and private market value (PMV), which encompasses on and off balance sheet assets and liabilities. Our team arrives at a PMV valuation by a rigorous assessment of fundamentals from publicly available information and judgement gained from meeting management, covering all size companies globally and our comprehensive, accumulated knowledge of a variety of sectors. We then identify businesses for the portfolio possessing the proper margin of safety and research variables from our deep research universe.

Class I USD – LU1216601648
Class I EUR – LU1216601564
Class A USD – LU1216600913
Class A EUR – LU1216600673
Class R USD – LU1453359900
Class R EUR – LU1453360155

Disclaimer:
The information and any opinions have been obtained from or are based on sources believed to be reliable but accuracy cannot be guaranteed. No responsibility can be accepted for any consequential loss arising from the use of this information. The information is expressed at its date and is issued only to and directed only at those individuals who are permitted to receive such information in accordance with the applicable statutes. In some countries the distribution of this publication may be restricted. It is your responsibility to ﬁnd out what those restrictions are and observe them.

Some of the statements in this presentation may contain or be based on forward looking statements, forecasts, estimates, projections, targets, or prognosis (“forward looking statements”), which reﬂect the manager’s current view of future events, economic developments and ﬁnancial performance. Such forward looking statements are typically indicated by the use of words which express an estimate, expectation, belief, target or forecast. Such forward looking statements are based on an assessment of historical economic data, on the experience and current plans of the investment manager and/or certain advisors of the manager, and on the indicated sources. These forward looking statements contain no representation or warranty of whatever kind that such future events will occur or that they will occur as described herein, or that such results will be achieved by the fund or the investments of the fund, as the occurrence of these events and the results of the fund are subject to various risks and uncertainties. The actual portfolio, and thus results, of the fund may differ substantially from those assumed in the forward looking statements. The manager and its affiliates will not undertake to update or review the forward looking statements contained in this presentation, whether as result of new information or any future event or otherwise.

From Quantitative Easing (QE) to Quantitative Tightening (QT)

| For Gabriela Huerta | 0 Comentarios

De la flexibilización cuantitativa (QE) al ajuste cuantitativo (QT) — Courtesy photo. From Quantitative Easing (QE) to Quantitative Tightening (QT)

This month of September is the tenth anniversary of the fall of Lehman Brothers, which was back then the fourth largest bank in the USA, and it initiated the worst global financial crisis in recent decades. The hyper-debt was not able to support the existing economic model, and the central banks, in a coordinated action, came to the rescue by applying unconventional policies known as Quantitative Easing, which is based on asset purchasing programmes that help inject liquidity into the market. The objective was to reactivate the flow of credit in the economy by artificially keeping the interest rates low (ZIRP, zero interest rate policy) or in negative figures (NIRP, negative interest rate policy).

The main milestones reached were the deleverage of the private sector and a financial system that had to assume stricter regulations and frequent controls in adverse scenarios (stress tests), as well as achieve further solvency by means of higher capital ratios. All of this despite the regulatory cost making them less profitable. However, the macroeconomic variables are being normalised in the main economies. The IMF, in its latest publication of the World Economic Outlook, expects an overall growth of 3.9%, for both 2018 and 2019.

At this stage, when it seems like we are overcoming the financial crisis and economic depression and the world economy is expanding, the main central banks are getting ready to reverse their balance sheet and start down a path to the normalisation of the monetary policy. This process is known as Quantitative Tightening, and it is the process of reverting Quantitative Easing. The Federal Reserve started this process in November 2017, and it has already reduced the balance in 237.9 Billion USD. The European Central Bank will reduce the monthly rate of net purchases of assets to 15,000 million euros until late December 2018 and it foresees its cessation from then on.

According to Bloomberg data, in the ten-year period between 2008 and 2017, all central banks have trebled their balance sheet, which has involved an injection of 14,245.6 Billion USD. This expansive policy has flooded the market with liquidity and, undoubtedly, helped raise the price of assets. This in turn has led to the so-called portfolio effect, by means of which the central bank’s purchase of lower risk assets (government bonds, IG credit, covered bonds) has encouraged investors to purchase higher risk bonds, whether due to the lack of bonds in this segment or due to seeking a higher performance.

It is only natural that investors are concerned about knowing what will happen when all this liquidity is drained and the interest rates rise (the FED, immersed in this process, has increased its reference rate from 0.25 to 2% since December 2015). There is certainly a risk of the prices of assets dropping during this reversal process. There is currently a particular need for the central banks to measure correctly the different risks at a macroeconomic (especially the predictions of inflation), financial and geopolitical level, so the monetary normalisation can be carried out without any hiccups. In fact, the markets are also more volatile this year than in 2017. The price war or the Turkish crisis played a significant role, but surely so did the QT, as the better performance of the US government bonds and the appreciation of the dollar have contributed to the prices of emerging market bonds, for example.

In this context, who can be the big winners? The money market investors, who will be able to invest at better interest rates; for example: the three-month treasury bills in the USA have gone from offering an interest rate below 1% just a year ago to 2.13% today.

What are the major corporate pension plans doing to protect themselves from the rise of interest rates or a greater volatility? They are incorporating real assets that generate recurring income, such as real state, or investing in infrastructure. Many already consider them as the new bonds, which improve the performance and reduce the global risk of the portfolios.

Column by Josep Maria Pon, Head of Fixed Income at Crèdit Andorrà Asset Management. Crèdit Andorrà Financial Group Research.

Despite the Uncertainty About U.S. Trade Policy, Equity Markets Continue to Rally

| For Gabriela Huerta | 0 Comentarios

U.S. equities closed August with a solid gain and set a record high even as the ongoing multi-front trade war’s ripple effects spread to include more products and industries in the EU, China, Canada and Mexico. NAFTA talks are active. Investors were encouraged by strong economic and booming corporate profit data fuelled by the new lower tax rate. Second quarter after tax earnings grew at the highest rate in six years and GDP grew at a 4.2 percent annualized rate. The bull market that started on March 9, 2009 is now the longest post World War II bull move on record since there has been no 20 percent or more decline. August ended with many questions about U.S. trade policy still unanswered. If left unresolved this may weigh on stocks as specific profit dynamics erode.

The economic implications of the historically flat U.S. Treasury yield curve have become a focus of debate. The Fed is undeterred and continues to raise rates which is keeping the dollar up, emerging markets down, and inflation in focus. In the UK and Europe, Brexit and the Italian budget deficit are two way catalysts.

Agricultural products have been center stage as soybean exports and imports with China have gotten worldwide attention. The U.S. dollar has gained year to date against the major emerging market currencies while U.S. stocks have remained in the global performance sweet spot versus lagging non-US markets.

In the U.S. blue vs red political arena, mid-term elections will be held on Tues Nov 6, 2018. The pundits expect a split Congress, with Democratic control in the House and a Republican controlled Senate. President Trump is the wildcard catalyst so the outcome may be the unexpected as was the case in November 2016 when financial market volatility spiked, will history repeat itself?

In the ongoing deal arena, British TV group Sky PLC is the target of an intense bidding war among Comcast, Disney and 21st Century Fox and the U.K. Takeover Panel is the referee of this complex heavy weight match. More background around two deals in the telecom and media space:

Sky plc (SKY LN-London), the European telecommunications provider and broadcaster, continued to be the subject of a bidding war between Disney (through its pending acquisition of Twenty-First Century Fox) and Comcast. On July 11, Disney boosted its bid for Sky to £14.00 cash per share, and hours later Comcast increased its bid to £14.75 cash per share, which values Sky at £33 billion. Shareholders approved Disney’s acquisition of Fox at a meeting of shareholders on July 27 after fending off an unsolicited bid from Comcast. The approval means that Disney will also acquire Fox’s 39% ownership of Sky which puts it in an advantageous position to increase its bid.
Tribune Media Company (TRCO-NYSE) suffered a setback after the FCC designated its proposed acquisition by Sinclair Broadcasting to an administrative law judge (ALJ.) Despite signs that the DOJ was close to approving the transaction on antitrust grounds, the FCC said it objected to the proposed buyers of the stations the company had agreed to divest. It appeared unlikely the FCC would approve the deal, and it was subsequently terminated on August 9. We remain constructive on shares of Tribune. The company has valuable assets including real estate, and a 35% stake in Food Network and recently received a favorable court ruling on the UHF discount. We believe there are a number of opportunities to surface value. With broadcaster Nexstar and private equity firms circling the company, Tribune is widely expected to put itself up for sale again in September. Tribune shares are trading near $37 in August.

Stay tuned…

Column by Gabelli Funds, written by Michael Gabelli

To access our proprietary value investment methodology, and dedicated merger arbitrage portfolio we offer the following UCITS Funds in each discipline:

GAMCO MERGER ARBITRAGE

GAMCO Merger Arbitrage UCITS Fund, launched in October 2011, is an open-end fund incorporated in Luxembourg and compliant with UCITS regulation. The team, dedicated strategy, and record dates back to 1985. The objective of the GAMCO Merger Arbitrage Fund is to achieve long-term capital growth by investing primarily in announced equity merger and acquisition transactions while maintaining a diversified portfolio. The Fund utilizes a highly specialized investment approach designed principally to profit from the successful completion of proposed mergers, takeovers, tender offers, leveraged buyouts and other types of corporate reorganizations. Analyzes and continuously monitors each pending transaction for potential risk, including: regulatory, terms, financing, and shareholder approval.

Merger investments are a highly liquid, non-market correlated, proven and consistent alternative to traditional fixed income and equity securities. Merger returns are dependent on deal spreads. Deal spreads are a function of time, deal risk premium, and interest rates. Returns are thus correlated to interest rate changes over the medium term and not the broader equity market. The prospect of rising rates would imply higher returns on mergers as spreads widen to compensate arbitrageurs. As bond markets decline (interest rates rise), merger returns should improve as capital allocation decisions adjust to the changes in the costs of capital.

Broad Market volatility can lead to widening of spreads in merger positions, coupled with our well-researched merger portfolios, offer the potential for enhanced IRRs through dynamic position sizing. Daily price volatility fluctuations coupled with less proprietary capital (the Volcker rule) in the U.S. have contributed to improving merger spreads and thus, overall returns. Thus our fund is well positioned as a cash substitute or fixed income alternative.

Our objectives are to compound and preserve wealth over time, while remaining non-correlated to the broad global markets. We created our first dedicated merger fund 32 years ago. Since then, our merger performance has grown client assets at an annualized rate of approximately 10.7% gross and 7.6% net since 1985. Today, we manage assets on behalf of institutional and high net worth clients globally in a variety of fund structures and mandates.

Class I USD – LU0687944552
Class I EUR – LU0687944396
Class A USD – LU0687943745
Class A EUR – LU0687943661
Class R USD – LU1453360825
Class R EUR – LU1453361476

GAMCO ALL CAP VALUE

The GAMCO All Cap Value UCITS Fund launched in May, 2015 utilizes Gabelli’s its proprietary PMV with a Catalyst™ investment methodology, which has been in place since 1977. The Fund seeks absolute returns through event driven value investing. Our methodology centers around fundamental, research-driven, value based investing with a focus on asset values, cash flows and identifiable catalysts to maximize returns independent of market direction. The fund draws on the experience of its global portfolio team and 35+ value research analysts.

GAMCO is an active, bottom-up, value investor, and seeks to achieve real capital appreciation (relative to inflation) over the long term regardless of market cycles. Our value-oriented stock selection process is based on the fundamental investment principles first articulated in 1934 by Graham and Dodd, the founders of modern security analysis, and further augmented by Mario Gabelli in 1977 with his introduction of the concepts of Private Market Value (PMV) with a Catalyst™ into equity analysis. PMV with a Catalyst™ is our unique research methodology that focuses on individual stock selection by identifying firms selling below intrinsic value with a reasonable probability of realizing their PMV’s which we define as the price a strategic or financial acquirer would be willing to pay for the entire enterprise. The fundamental valuation factors utilized to evaluate securities prior to inclusion/exclusion into the portfolio, our research driven approach views fundamental analysis as a three pronged approach: free cash flow (earnings before, interest, taxes, depreciation and amortization, or EBITDA, minus the capital expenditures necessary to grow/maintain the business); earnings per share trends; and private market value (PMV), which encompasses on and off balance sheet assets and liabilities. Our team arrives at a PMV valuation by a rigorous assessment of fundamentals from publicly available information and judgement gained from meeting management, covering all size companies globally and our comprehensive, accumulated knowledge of a variety of sectors. We then identify businesses for the portfolio possessing the proper margin of safety and research variables from our deep research universe.

Class I USD – LU1216601648
Class I EUR – LU1216601564
Class A USD – LU1216600913
Class A EUR – LU1216600673
Class R USD – LU1453359900
Class R EUR – LU1453360155

Disclaimer:
The information and any opinions have been obtained from or are based on sources believed to be reliable but accuracy cannot be guaranteed. No responsibility can be accepted for any consequential loss arising from the use of this information. The information is expressed at its date and is issued only to and directed only at those individuals who are permitted to receive such information in accordance with the applicable statutes. In some countries the distribution of this publication may be restricted. It is your responsibility to ﬁnd out what those restrictions are and observe them.

Some of the statements in this presentation may contain or be based on forward looking statements, forecasts, estimates, projections, targets, or prognosis (“forward looking statements”), which reﬂect the manager’s current view of future events, economic developments and ﬁnancial performance. Such forward looking statements are typically indicated by the use of words which express an estimate, expectation, belief, target or forecast. Such forward looking statements are based on an assessment of historical economic data, on the experience and current plans of the investment manager and/or certain advisors of the manager, and on the indicated sources. These forward looking statements contain no representation or warranty of whatever kind that such future events will occur or that they will occur as described herein, or that such results will be achieved by the fund or the investments of the fund, as the occurrence of these events and the results of the fund are subject to various risks and uncertainties. The actual portfolio, and thus results, of the fund may differ substantially from those assumed in the forward looking statements. The manager and its affiliates will not undertake to update or review the forward looking statements contained in this presentation, whether as result of new information or any future event or otherwise.

Rising Rates Series: Ride the Current with Floating Rate Notes

| For Gabriela Huerta | 0 Comentarios

We have come a long way from the “zero interest rate policy” implemented by the U.S. Federal Reserve in the aftermath of the financial crisis. Today, the Fed Funds target rate, the rate it pays banks on excess reserves, is in the range of 1.75–2.00%. The Fed is widely expected to raise rates at least one more time this year following a 0.25% hike on June 13; that would put the target in the range of 2.00%-2.25%, a level not seen since 2008. (Source: FRED/St. Louis Federal Reserve.)

One of the ways that investors can help navigate a rising rate environment is through exposure to bonds with coupons that adjust, or float, with short-term interest rates. These adjustments mean investors are not exposed to potential price losses, and can also benefit from income increases as rates rise over time.

Understanding floating rate notes

While there are several types of debt instruments with variable interest rates, such as bank loans or variable rate demand notes (VRDNs), floating rate notes (FRNs) are growing more popular with investors. These investment-grade bonds, issued primarily by corporations, have coupons that periodically reset using a short-term interest rate and typically have maturity dates ranging from 18 months to five years. Most floating rate notes pay coupons quarterly, but a few pay monthly.

How are coupons reset?

FRN coupons are adjusted on periodic reset dates, typically three months after the bond was issued. The coupons are calculated based on the following formula:
Coupon = Reference Index Rate + Fixed Spread
The reference index is a short-term interest rate, typically the 1-month or 3-month London Interbank Offer Rate (LIBOR). LIBOR is the rate an international bank would charge another bank for a short-term loan, so it tends to be higher than the Fed Funds target rate.

The fixed spread is determined at the time of issuance, and is based on the market’s perception of the issuer’s credit risk. The fixed spread does not change over the life of the bond. Here’s an illustration of how resets might work.

Enlarge

Floating rate notes versus bank loans

Investors might be familiar with bank loans or leveraged loans, which are high-yield loans that also have coupons that reset with 3-month LIBOR. The popularity of these instruments has grown over the past decade, as investors sought higher yields when rates were exceedingly low. While FRNs and bank loans both offer floating interest rates, they have key differences in terms of credit quality and liquidity.

Enlarge

For illustrative purposes only. This illustration does not represent the actual performance of any iShares Fund.

Floating rate notes in a portfolio

Investors can use FRNs to help manage risk and return in a rising rate environment, by making adjustments to their portfolios:

Put cash to work – Investors who use cash equivalents in an effort to protect portfolios from rising rates run the risk that their income might not keep pace with inflation. Floating rate notes may offer more income to help maintain purchasing power, although it’s important to note they don’t have protection of principal as a bank deposit or money market fund would.
Reduce portfolio duration – The duration, or interest rate sensitivity, of floating rate notes tends to be very short, as the bond’s coupon regularly resets. The Bloomberg Barclays Floating Rate Note <5 Years Index had a duration of 0.15 years as of May 31, 2018, meaning it carries very little exposure to interest rate risk. By comparison, core bond indexes like the Bloomberg Barclays U.S. Aggregate Index had a duration of 5.95 years. (Durations are from Bloomberg.)
Gain exposure to short-duration credit – FRNs offer access to corporate debt, which may generate more income than a similar maturity U.S. government bond. However, U.S. government bonds are generally considered to have less credit risk.

Exchange traded funds, such as iShares Floating Rate Bond ETF (FLOT), are a convenient, low-cost way to add diversified exposure to a bond portfolio, while managing interest rate risk in a rising rate environment.

Build on Insight, by BlackRock, written by Karen Schenone, CFA Fixed Income Product Strategist

Carefully consider the Funds’ investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.blackrock.com/latamiberia. Read the prospectus carefully before investing.
Investing involves risk, including possible loss of principal.
Fixed income risks include interest-rate and credit risk. Typically, when interest rates rise, there is a corresponding decline in bond values. Credit risk refers to the possibility that the bond issuer will not be able to make principal and interest payments.
Securities with floating or variable interest rates may decline in value if their coupon rates do not keep pace with comparable market interest rates. The Fund’s income may decline when interest rates fall because most of the debt instruments held by the Fund will have floating or variable rates.
When comparing stocks or bonds and iShares Funds, it should be remembered that management fees associated with fund investments, like iShares Funds, are not borne by investors in individual stocks or bonds. Buying and selling shares of iShares Funds will result in brokerage commissions.
Diversification and asset allocation may not protect against market risk or loss of principal.
There can be no assurance that an active trading market for shares of an ETF will develop or be maintained.
Transactions in shares of ETFs will result in brokerage commissions and will generate tax consequences. All regulated investment companies are obliged to distribute portfolio gains to shareholders.
An investment in fixed income funds is not equivalent to and involves risks not associated with an investment in cash. The Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”).
The iShares Funds are not sponsored, endorsed, issued, sold or promoted by Barclays or Bloomberg Finance L.P., nor do these companies make any representation regarding the advisability of investing in the Funds. BlackRock is not affiliated with the companies listed above.
This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of June 2018 and may change as subsequent conditions vary. The information and opinions contained in this post are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by BlackRock, its officers, employees or agents. This post may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections and forecasts. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this post is at the sole discretion of the reader.
In Latin America and Iberia, for institutional investors and financial intermediaries only (not for public distribution). This material is for educational purposes only and does not constitute investment advice or an offer or solicitation to sell or a solicitation of an offer to buy any shares of any fund or security and it is your responsibility to inform yourself of, and to observe, all applicable laws and regulations of your relevant jurisdiction. If any funds are mentioned or inferred in this material, such funds may not been registered with the securities regulators of Argentina, Brazil, Chile, Colombia, Mexico, Panama, Peru, Portugal, Spain Uruguay or any other securities regulator in any Latin American or Iberian country and thus, may not be publicly offered in any such countries. The securities regulators of any country within Latin America or Iberia have not confirmed the accuracy of any information contained herein. No information discussed herein can be provided to the general public in Latin America or Iberia. The contents of this material are strictly confidential and must not be passed to any third party.
©2018 BlackRock. iSHARES and BLACKROCK are registered trademarks of BlackRock. All other marks are the property of their respective owners.
593897

Should Investors be Worried About EM Contagion?

| For Gabriela Huerta | 0 Comentarios

¿Deberían los inversores preocuparse por el contagio a los mercados emergentes? — Foto cedida. Should Investors be Worried About EM Contagion?

Emerging markets are in free fall. The main reasons for the decline are the recent US dollar strength, trade war fears, and, more recently, the sharp devaluation of the Turkish lira. The abrupt sell-off evokes memories of the Mexican peso crisis of 1994/1995, the Asian financial crisis of 1997/1998, and, more recently, the Chinese devaluation and stock market turbulence of 2015/2016. Should investors be worried about emerging market contagion?

The crisis in Turkey is hardly surprising. Its economy suffers from a large trade deficit (6.3% of GDP), high external funding needs, and rising inflationary pressures. Consumer price inflation surged from around 10% at the beginning of the year to above 15% by June. Nevertheless, the central bank left the policy rate unchanged at 17.75% at its July policy meeting. It became evident that President Erdogan’s criticism of higher interest rates has undermined central bank independence. This opened the door for bets against the lira. There is hope that a more comprehensive policy, combined with fiscal and monetary austerity, could stabilize the currency and avoid an inflationary spiral, although this could push the economy into a recession in 2019. The good news is that there are only minor economic links between Turkey and other emerging markets.

More importantly, Turkey’s major emerging market peers are in better shape. Fundamentals are healthy, with improved trade and fiscal accounts and low inflation. Foreign debt levels are not excessive and a number of major countries, especially China, have sizeable hard currency reserves in place. Demographic factors also continue to be favorable in comparison with advanced economies. Finally, there is a tendency toward structural reforms, stronger institutions, and anti-corruption policies that should improve longer-term financial stability. For now it appears that China and Brazil are the only countries that could trigger a deeper financial crisis, due to their size and rising sovereign-debt (Brazil) and corporate-debt (China) levels.

Brazil has initiated an ambitious reform process. The country is at an early stage of an economic recovery following the sharp recession of 2015/2016, since when the trade deficit has been largely eliminated. Inflation and interest rates are low in comparison to what they have been. This, together with significant hard currency reserves and a direct swap line with the US Federal Reserve, gives the central bank plenty of room to counterbalance pressures and defend the foreign exchange rate. The problem is that Brazil needs economic growth to offset its souring public debt levels, meaning that the reform path needs to be continued. Volatility is therefore likely to persist ahead of the upcoming presidential election in October. However, given the illegibility of former president Lula, the most likely outcome is still a relatively market-friendly, though populistic, center-right government, which could lead to a relief rally.

China has started to transform and modernize its economy and this should lead to more sustainable and robust, albeit somewhat slower, economic growth. Policy measures in the past two years have included a reduction of fiscal and monetary stimulus to deflate the housing bubble and reduce local and corporate debt levels. Economic growth has continued to slow at a moderate pace, from above 7% to around 6.5%. The recent depreciation of the yuan is no great surprise, given the general US dollar strength as well as the narrowing growth, trade deficit, and interest-rate gaps compared to the US. Of course, the main risk is an escalating trade war. Given President Trump´s rising approval ratings and recent political scandals around his lawyer and campaign manager, he may continue to play tough to please his main supporters. Trade tensions could therefore intensify ahead of the US mid-term elections in November. However, China has already started to implement small policy adjustments to bolster the economy’s defenses against the negative impact of US tariffs, which should start to become visible in Q4. Even if the US imposes a 25% tariff on another USD250bn of Chinese goods, the growth drag should be less than 1% and an additional stimulus should help keep GDP growth above 6% in 2019. In a more market-friendly scenario, Trump’s tone could become more reconciliatory once the elections are over.

In fact, Trump’s introduction and threats of tariffs and other sanctions have been the main drivers of the recent USD rally, which has been the biggest headwind for emerging markets. Given the extensive media coverage, and as Trump has already threatened to impose tariffs on basically all Chinese imports, a lot of bad news must be priced in. Nevertheless, markets hate uncertainty and volatility is likely to remain high throughout the political campaign period in the US, and to a lesser degree in Brazil. Unless the situation gets completely out of control, we may well see a catch-up rally toward the end of the year.

Column by Pascal Rohner, CFA, CIO Banco Crèdit Andorrà (Panamá), Crèdit Andorrà Financial Group Research.

International Wealth Protection Clarifies and Validates the Tax Benefits of Private Placement Life Insurance in Peru

| For Magdalena Martínez | 0 Comentarios

International Wealth Protection aclara y valida los beneficios tributarios del seguro de vida en Perú — . International Wealth Protection Clarifies and Validates the Tax Benefits of Private Placement Life Insurance in Peru

The utilization of Private Placement Life Insurance has been considered as a planning strategy for wealthy Peruvian families as a result of the enactment of Peru’s Controlled Foreign Company (CFC) Rules Regime December 31st, 2013.

Since then, most of the highly reputable Peruvian law firms agree that Private Placement Life Insurance should be considered as a planning strategy for wealthy Peruvian families and have been seeking the advice of International Wealth Protection. After attending multiple tax planning meetings with Peruvian clients and their tax advisor where Private Placement Life Insurance was a major point of discussion, most concluded with a sense of ambiguity on the subject since this norm left one unanswered question that was the premise of the many disclaimer pages that accompanied every legal opinion issued by the most renowned attorneys: “Will the Peruvian tax authority, SUNAT (Superentendencia Nacional de Administracion Tributaria) back the law as outlined by the Peruvian Superintendent of Banks and Insurance (SBS)”?

Knowing the unparalleled benefits of Private Placement Life Insurance which make it a viable and sustainable solution proven to be effective in highly regulated and taxed jurisdictions as are the USA and Europe, International Wealth Protected decided to walk the talk and truly put the client interests first and take the appropriate steps to validate its legal recognition directly from the SUNAT knowing that anything other than a fully favorable response would obliterate the offering as we knew. We debated the strategy with opponents, but in the end decided to proceed in the best interest of the Peruvian client and the integrity of the insurance industry in the long term. The consultations made to the SUNAT were based on the tax implications for life insurance policies issued by foreign insurance carriers regarding the insurance proceeds paid to Peruvian residents and the partial withdrawals to the policy executed by the policy holder.

On July 2, 2018, one year after the original consultation was made by International Wealth Protection with the support of EY Peru and the Lima Chamber of Commerce, the SUNAT finally issued a response to every question made, citing specific laws with a favorable conclusion.

The SUNAT confirmed that regardless of the issuing jurisdiction of the insurance carrier, the death benefit paid to any natural Peruvian resident is not subject to Peruvian Income Tax. As relates to partial withdrawals on a life insurance policy issued by a foreign insurer, the SUNAT confirmed that Peruvian Income Tax will be applicable to the capital gains appreciated within said withdrawal. If there are no partial withdrawals from the Insurance Policy, the accumulated gains and returns will be completely under the tax deferment regime.

While many Private Placement Life Insurance representatives are popping the champagne and utilizing the response to our inquiry (which they strongly opposed), International Wealth Protection remains cautious when collaborating with the client’s most trusted advisors.

We advise and recommend the following to those considering the implementation of Private Placement Life Insurance for Peru’s most wealthy residents. Please make sure to involve an expert with the ability to:

•   Respect the two main elements that allow the product to pass the “substance over form” test which are Investor Control and Risk Shift
•   Practice objectivity by representing several providers and proposing 2 to 3 product alternatives to the client
•   Transmit full understanding of the solution including cross border implications and not a specific product
•   Implement tailor made products given the unique characteristics of a wealthy client
•   Understand this is a niche product designed for the ultra-rich and is not a retail offering
•   Provide design flexibility, institutional pricing, and immediate revocability without surrender charges.

The inability to provide these critical factors is inconsistent with industry standards and can inject vulnerability into the transaction.

Honoring that “doing what is right is always the right thing”, I am pleased by the outcome of our endeavor and extremely happy to share this great accomplishment with those that can benefit from it.

For your information, the response is now published on the SUNAT website.

Column by Mary Oliva, President- International Wealth Protection