The CONSAR announced a modification to the investment regime of the AFOREs: the limit for investing in structured instruments (alternative assets) will increase from 20% to 30% (press release). This expansion is subject to the conditions that will be established in the Circular Única Financiera (CUF), which is still pending publication.
Although the market remains on hold awaiting these guidelines, it is worth reviewing how AFOREs’ preferences have evolved over the past three years.
At the end of February, the assets under management of the AFOREs amounted to 343.317 billion dollars, of which 29.860 billion (8.7%) were invested in structured instruments, both local and international, at market value.
Of that total, internal estimates suggest that 4.3% corresponds to local investments (CKDs) and 4.4% to international ones (CERPIs). Considering that by regulation at least 10% of the CERPIs’ portfolio must be invested in Mexico, at least 0.4% of that 4.4% also has a national component, bringing the total proportion of local investment to 4.7% and international investment to 4%.
Now, if instead of market value we consider committed capital, the picture changes, and investment in structured products rises to 19.9% of total assets, which is a level very close to the regulatory limit. Of that percentage, 42% corresponds to CKDs (local investments) and 58% to CERPIs, consolidating the portfolio’s tilt toward international vehicles.
At market value, local investments stood at 16.885 billion dollars, while international investments reached 17.300 billion dollars as of the end of December, marking 2022 as the point when the market value of CERPIs began to surpass that of CKDs.
However, when reviewing the commitments of each, there are differences that favor international investments: 39.634 billion dollars in CERPIs vs 26.696 billion dollars in CKDs.
The age of the CKDs (2009) reflects a favorable trend in distributions, which as of the end of December 2024 stands at 10.648 billion dollars, while in the case of the CERPIs (2016 and international in 2018), it barely reaches 1.089 billion dollars.
In the last three years, new placements have favored CERPIs over CKDs in both number of funds (155 out of 161) and committed capital (82% of the total issued between the two).
The new CERPI issuances have been allocated to fund of funds and feeder funds of the AFOREs, with an amount totaling 22.739 billion dollars, which represents 96% of the committed capital. These investments have gradually allowed the AFOREs to invest in international funds between 2021 and 2024.
From the CKD issuances, commitments have been channeled primarily to the energy sector (92%), private credit (3%), and real estate (3%).
The new limit on alternatives (structured products) represents more than just a percentage increase—it is a silent warning for the local market. If CKDs fail to adapt to an environment where efficiency, diversification, and results are a priority, they risk falling behind compared to vehicles that are much more aligned with the AFOREs’ global vision.
The dynamic interplay between the Latin American high net worth individuals (HNWIs) and Florida’s real estate market, particularly in Miami, has been transformative over the past few decades. As Latin America has experienced periods of economic uncertainty, political instability, and fluctuating currencies, the demand for stable, profitable real estate opportunities has increased significantly. For HNWIs from Latin America, Florida — with Miami at its epicenter — has become the go-to location for securing both wealth and lifestyle. This article explores how the influx of Latin American HNWIs has shaped the real estate landscape in Florida, with an emphasis on Miami, and the vital role of private bankers and investment advisors in facilitating their entry into the market.
Florida has long been a favored destination for Latin American HNWIs, primarily due to its proximity, cultural ties, and favorable tax environment. Miami, in particular, serves as a financial, cultural, and real estate hub that attracts individuals from countries like Brazil, Argentina, Mexico, Colombia, and Venezuela. These individuals are typically seeking both a safe haven for their wealth and an opportunity for a better quality of life, which Florida offers through its luxury properties, vibrant business environment, and access to global markets. In 2024, real estate sales to foreign investors in Miami slightly decreased from $6.8 billion to $5.1 billion. However, Latin American buyers remained dominant, constituting at least one-third of these transactions. This trend reflects a sustained interest and investment in Miami’s real estate, despite broader market fluctuations.
The political and economic instability in many Latin American countries often drives the wealthy to look for more stable environments for some of their assets. The 2000s and early 2010s saw a wave of Latin American wealthy individuals and families purchasing real estate in Florida, particularly in Miami, as a hedge against risks back home. Political volatility, currency depreciation, and inflation have pushed many HNWIs to seek refuge in US markets where they can diversify their investments, obtain capital appreciation, and secure residency options.
Miami’s unique combination of attractive weather, beaches, cultural richness, and its status as an international business and financial hub makes it an obvious choice for Latin American HNWIs. The city has transformed over the years, with the development of luxury condos, waterfront properties, and penthouses, many of which are marketed directly to affluent foreign buyers. This has led to an upscale real estate boom, particularly in areas like South Beach, Brickell, and Coral Gables.
Real estate developers have increasingly catered to the tastes and demands of Latin American HNWIs by designing properties with cutting-edge architecture, high-end amenities, and views of the Atlantic Ocean or Biscayne Bay. This surge in demand has been met with increased luxury developments, including world-class condominiums, private villas, and multi-million-dollar estates. Miami’s real estate market now has a significant presence of foreign capital, and it has established itself as a key player on the global luxury real estate stage.
While the allure of Florida’s real estate market is clear, navigating the intricacies of purchasing and managing properties in a foreign country can be challenging. This is where private bankers and investment advisors step in. These professionals play a crucial role in advising their clients and facilitating access to the most suitable opportunities.
Investment advisors and private bankers often work closely with Latin American HNWIs to understand their goals and provide tailored solutions that align with their financial objectives. This includes finding real estate opportunities that meet not only the client’s lifestyle preferences but also their investment goals. Whether it’s looking for properties with high rental income potential, capital appreciation prospects, or simply a safe haven for wealth, advisors provide invaluable insights into the Florida market, helping clients identify the best investment opportunities.
Real estate investments are often a complex process involving legalities, taxes, and financing strategies, which can be especially daunting for foreign buyers. Investment advisor firms such as Boreal Capital Management assist clients in navigating these challenges by recommending trusted legal counsel, guiding them through tax implications, and even facilitating access to financing options. For instance, many Latin American investors prefer to hold and finance their properties through US-based institutions, and advisors help facilitate these transactions.
In this context, our investment advisors regularly ensure that our clients are well-versed in the financial and legal nuances of buying property in the United States. This expertise helps clients mitigate risks and maximize their returns on investment. Furthermore, the ability to consult with professionals fluent in both English and Spanish is particularly valuable for Latin American HNWIs who prefer working in their native language.
In addition to their financial services, private bankers and investment advisors also understand the lifestyle aspirations of their clients. Latin American HNWIs often seek properties that not only serve as investments but also offer an enhanced quality of life. Investment advisors can guide clients toward neighborhoods or specific developments that cater to their lifestyle needs, such as proximity to top schools, world-class restaurants, and exclusive social clubs.
Moreover, private bankers are instrumental in advising on residency and immigration options that may come with property ownership. Programs like the EB-5 investor visa and other residency-by-investment opportunities further enhance the appeal of Miami real estate, offering Latin American HNWIs a pathway to permanent residency in the US. These advisory services, combined with access to premium real estate offerings, make Miami an even more attractive destination for wealthy individuals.
The growing presence of Latin American HNWIs in Florida’s real estate market, particularly in Miami, has significantly influenced both the development and performance of the market. Driven by a desire for stability, safety, and high returns, Latin American investors have become an integral part of the luxury real estate landscape in Miami. The role of private bankers and investment advisors is crucial in facilitating these investments.
As Miami continues to be a hotspot for international investment, the collaboration between wealth management firms such as Boreal Capital Management and real estate professionals will only grow in importance, ensuring that Latin American HNWIs continue to find success in this vibrant market.
Opinion article by Joaquín Frances, CEO of Boreal Capital Management
U.S. stocks were lower in February, primarily driven by underperformance in the Nasdaq and Russell 2000. The month was characterized by a shift from growth to value, as rising concerns over the sustainability of the AI secular growth narrative nudged several of the “Magnificent 7” stocks into correction territory.
Political dynamics remained a dominant theme as President Trump, now a full month into his second term, continued to push his deregulation and pro-growth policies. Yet, market sentiment was tempered by persistent concerns over the impact of his tariff policies on both domestic and international companies. The month began with President Trump announcing 25% tariffs on Canada & Mexico and 10% on China*. While those tariffs were ultimately delayed as negotiations were ongoing, the uncertainty of trade war developments has set the stage for potential volatility ahead.
Economists worry that expectations of higher growth under President Trump’s administration could keep inflation elevated for longer, potentially complicating the Federal Reserve’s policy path. In Fed Chair Powell’s semiannual monetary policy report to Congress, he noted that recent indicators suggest economic activity has continued to expand at a solid pace, with GDP rising 2.5% in 2024. He added that as the economy evolves, the Fed will adjust its policy stance to best promote maximum employment and stable prices.
Small-cap value stocks underperformed their large-cap value counterparts during the month, as concerns over “higher for longer” interest rates have continued to be a near-term headwind. However, as rates trend lower, we believe small- and mid-sized companies are well-positioned to benefit through 2025/2026 from stronger domestic growth and pro-business policies.
New deal activity remains healthy at $862 billion globally, an increase of 15% compared to 2024 levels. M&A advisers remain upbeat about corporate appetite to make acquisitions due to a return to a more traditional regulatory framework. Some acquirers are choosing to wait for greater certainty and/or clarity on tariffs and the Trump Administrations priorities.
Opinion by Michael Gabelli, managing director of Gabelli & Partners
* This article was written prior to U.S. President Donald Trump’s recent announcements on tariffs.
Last week, Google announced that it would acquire Wiz for $32 billion, marking its largest acquisition ever. Wiz, which offers cloud security solutions, was founded in 2020 and by the end of 2022 was already valued at $6 billion. By 2023 the company had achieved $100 million in recurrent revenue “ARR”, and by YE-2024 the company was reported to reach a stunning $500 million in ARR, demonstrating a unique capacity to grow sales at an impressive pace. Wiz received venture backing from its onset. Its first institutional round was for $20 million. Those early investors, which included the famous Sequoia Capital may reap close to a 100X gross over their original investment.
Venture is the one category within the private assets world that it is not actively raising capital from the wealth industry, yet certainly exploring options on how to. It’s also the riskiest and probably least understood space of private investing, although nowadays there’s a never-ending sleuth of podcasts and articles to learn about it.
Accessing and selecting VC funds is also complicated. The one easy path for retail investors is to participate in venture-backed companies when these become public through an IPO. Once publicly traded, VC funds will typically maintain their position until they find the right moment to exit, potentially generating better outcomes for investors, keeping their board seats and therefore their influence. Not all VC-backed companies go public though, many exits occur through strategic acquisitions as in the case of Wiz.
VC-backed companies raise money through capital rounds, starting with seed and all the way to growth capital. At the seed stage, a particular technology or service may still be a project in paper and the funds would be used by the founders to kickstart the company. Once the growth stage is reached, the company typically has proven sales and customers. Capital would be employed for expansion projects through marketing, hiring top performing sales professionals or developers, amongst other initiatives. From seed to growth to a potential IPO, an average VC-backed company would have raised capital about 6 to 8 times throughout a cycle of 10 years or more, although the amount of capital and number of rounds required varies.
The VC industry has historically been recognized for being able to generate exponential results over relatively small investments. A good example is Amazon: it took only two rounds of outside investor funding (the second by a venture fund) for a total of $9 million to help it achieve self-sustainability and its future valuation.
However, cases like Amazon and Wiz are true outliers, even within the VC universe: they resulted in outsized returns for institutional backers. Double or even triple digit multiples are quite rare yet are targeted by all VC funds as they represent a fundamental element of the industry: the power-law.
You will hear that VC is a power-law industry meaning in practical terms that for any number of investments, it is only a very limited number of those that explain the returns of a venture fund. Imagine for instance a seed fund that made a series of investments and 10% of capital returned 100X. No matter what happens to the rest of the portfolio, that fund would have achieved at least a 10X gross (10% times 100).
As mentioned above, very high returns (in the order of 50X or above) are extremely rare (less than 1% of all seed investments made) whereas capital loss due to projects failing can exceed 50% in any given seed fund. Devoid of power-law results, seed funds would likely provide poor returns for investors.
Alas, not all VC investing relies solely on a model where a very small fraction of invested capital drives all returns. Growth-venture is a more accessible space as funds that focus on this category tend to be much larger than early stage ones and typically invest in companies that have a proven track record, reducing the probability of capital loss. Entry points and prices though can be substantially higher than at the seed stage and therefore return expectations for specific investments tend to be lower. Wiz for instance was valued at about $70M when it got its institutional seed checks back in 2020 but it raised a growth round at the end of 2021 at the aforesaid $6B valuation. Compared to its destined exit value of $32B, that is more than a 5X growth multiple in value achieved in only 3-4 years, which is still impressive.
The message: growth venture can still produce very attractive returns, relying on a model in which investment periods are expected to be somewhat shorter and capital losses lower relative to seed investing. The table below compares some characteristics between these two categories.
Typical characteristics of seed and growth funds (using data for Vintages 2012 to 2022)
Source: produced with Grok Artificial Intelligence application. Carta Q2 2024 (fund sizes), PitchBook Q3 2024 (fund sizes up to $2B investments, rounds for 2012– 2022), Cambridge Associates (2024) (stage definitions for 2012– 2022).
Can I invest in venture?
This article covers a limited scope of the VC industry and some of its characteristics. Note that VC fund styles can vary and be more flexible in terms of investing strategy. Multistage funds, for instance, can invest in seed, core venture (which we did not touch upon in this article) and growth. Some of the most recognized VC funds actually fall under the multi-stage category.
VC funds are generally limited to qualified purchasers through traditional drawdown funds. Achieving top quartile returns in venture requires investing with the most recognized managers of the industry. To begin with, access to startup funding varies across VC funds: it is not a plain level field. It is widely recognized that founders tend to favor the most reputable funds and their partners, who often are invited first to invest in top-tier projects.However, accessing these partnerships is a time-consuming exercise. Typically, it is the purview of institutional investors and teams who focus on manager selection and nurturing relations with GP’s. In some cases, being invited to a capacity-constrained venture fund can take years of insistence.
Given this condition, an adequate allocation strategy for qualified retail investors is to commit to a fund of funds “FoFs” with demonstrated access to some of the top names. Interestingly, FoF’s nowadays may even accept capital commitments as low as $100K, providing proper diversification. Some of these may even incorporate co-investments in their approach to have direct exposure to companies like Wiz.
AMCS Group, an external distribution firm headquartered in Miami and Montevideo, announced in a statement the appointment of Rosario Palay as Sales Associate and Martina Alonso as Administration and Marketing Executive.
“These new additions come at a key moment, as the company has significantly increased the market presence of its three asset management partners, AXA Investment Managers, Jupiter Asset Management, and Man Group, in both the U.S. and Latin American markets,” the statement added.
Palay will assist the AMCS external sales team in achieving the firm’s growth plans in the Americas region. Her main responsibilities will include investment analysis, market research, and ensuring excellence in the daily experience of the firm’s advisor clients.
She will report directly to Santiago Sacias, Managing Partner and Head of Sales for Latin America. After two years as a Treasury Analyst at OCA, Palay brings her experience and an innovative perspective to AMCS Group.
Alonso, for her part, will report to Alfonso Peñasco, Head of Marketing and Product, and will initially be responsible for developing AMCS’s marketing platform, including client communication, web and social media presence, and event organization. She will work closely with the marketing and client service departments of the firm’s three asset management partners.
“We are thrilled to have Martina and Rosario join AMCS Group. Their experience and enthusiasm will help us significantly enhance our client experience. We look forward to their contributions to our ambitious growth plans,” said Andrés Munho, Co-Founder and Managing Partner, in the press release.
Thus, the AMCS Group team is currently structured as follows:
Chris Stapleton, Co-Founder and Managing Partner, oversees global key account relationships in the region, as well as advisor relationships on the West Coast.
Andrés Munho, Co-Founder and Managing Partner, oversees all advisory and private banking relationships in South Florida, as well as companies located in the Northern Cone of Latin America, including Colombia and Mexico.
Santiago Sacias, Managing Partner, based in Montevideo, leads sales strategies in the Southern Cone region, which includes Argentina, Uruguay, Chile, Brazil, and Peru.
Álvaro Palenga, Sales Director, is responsible for advisory and private banking relationships in the Miami metropolitan area and the southwestern U.S.
Carlos Aldavero, Sales Director, is responsible for advisory and private banking relationships in New York City and the broader Northeast region.
Daniel Vivas, Associate Sales Director, is responsible for advisory and private banking relationships in Argentina and Uruguay.
Alfonso Peñasco, Head of Marketing and Product, leads AMCS‘s marketing and events engine from Montevideo, as well as coordinates product and client strategy across the group.
Sebastián Araujo, Sales Associate, is based in Montevideo.
Insigneo reported that it has partnered with Luma Financial Technologies (“Luma”), a provider of structured products and insurance technology, to elevate its structured notes capabilities and further streamline financial advisor workflows.
Through the adoption of Luma’s market-leading technology, Insigneo is enhancing its existing offerings with real-time trade data, advanced reporting tools, and an optimized solution that supports every stage of the product life cycle, the company said in a statement.
This strategic move marks an important step in Insigneo’s growth, equipping its advisors with a more agile, robust, and intuitive approach to managing structured notes, it added. Luma will be integrated into Alia, the web-based solutions ecosystem owned by Insigneo and designed to enable investment professionals to manage their practices more efficiently and effectively.
With Luma’s unified solution, Insigneo advisors can access a suite of tools, including training modules, portfolio tracking, trade execution, and automated insights. Its integration with Insigneo’s infrastructure provides advisors with real-time visibility into their structured product activity while allowing data to enhance other key areas of the platform.
“We are thrilled to partner with Insigneo and supercharge their digital structured notes capabilities,” said Rafa Salvatierra, Head of Americas at Luma Financial Technologies. “We remain steadfast in our commitment to empowering financial advisors with cutting-edge technology, and we can’t wait to drive Insigneo’s digital evolution, unlocking new growth opportunities,” he added.
For his part, Pablo Ortega, Director, Head of Latin America and Issuer Relations at Luma Financial Technologies, stated: “Luma is designed to remove the complexities of discovering and managing structured notes, and Insigneo’s advisors will benefit from the enhanced tools Luma offers. We’re excited to support them in delivering greater transparency, flexibility, and access to cutting-edge solutions for their clients.”
“The integration of Luma’s technology marks a major milestone for Insigneo and our advisor network,” said Vicente Martín, Managing Director and Head of Structured Products at Insigneo. “By focusing on improving the advisor experience, we are expanding our capabilities to deliver innovative solutions and personalized support, meeting the evolving needs of our clients,” he added.
Although nearly 90% of Americans are currently saving or planning to save for short-term goals, 60% don’t fully understand how interest rates affect their savings, resulting in most U.S. residents placing their savings in slow-growing vehicles, often below the rate of inflation. In fact, 57% say their savings earn less than 3% interest, and 24% earn less than 1%.
These findings come from a new national consumer survey by Vanguard, which emphasizes idle cash in savings. The survey was conducted with a representative sample of 1,011 U.S. adults aged 18 and older.
“Americans are not getting the return they deserve on the money they’ve worked so hard to earn. While the vast majority are saving, most are not doing so in vehicles where their money is earning a fair return,” said Matt Benchener, Managing Director of Vanguard’s Personal Investor division.
The investment management company is on a mission to change that. Vanguard offers the Cash Plus account, which allows Americans to earn eight times more than with a traditional bank savings account.
“With inflation and fluctuating interest rates affecting purchasing power, it’s more important than ever to ensure consumers understand how to safeguard their savings. It’s time to start thinking beyond your bank,” the firm said in a press release.
Time Passes, Things Change
While Americans are saving short-term for various goals like vacations (38%), new cars (31%), and unexpected home repairs (24%), many have one thing in common: their savings accounts are not performing at their full potential. More than half of the respondents (54%) save in traditional bank savings accounts or checking accounts (39%), where average interest rates are about 0.41%, compared to rates like 3.65% in other savings vehicles, such as Vanguard’s Cash Plus account. “This may contribute to the fact that 72% of Americans don’t fully trust they’ll reach their savings goals in the next two years,” the company stated.
Although Americans aren’t taking advantage of the interest their savings could earn, they recognize the need to change their saving habits. 66% of respondents plan to adjust their current savings strategy in the next year, citing inflation (44%) as the main driver of this decision. But nearly a third of Americans don’t know how to begin making those changes.
“By leveraging accounts with competitive yields and establishing intentional savings strategies, Americans can make their money work harder,” said Andrew Kadjeski, Head of Brokerage and Investments for Vanguard’s Personal Investor business. “We’ve designed the Cash Plus account to give Americans a simple and effective way to save intentionally and view their savings alongside their long-term investments,” he added.
According to information provided by Vanguard, Cash Plus currently offers a 3.65% yield, compared to the average yield of bank savings accounts, which is 0.41%. Alongside Cash Plus, the company also offers a full suite of liquidity solutions, including money market funds and ultra-short bond funds.
AIS Financial Group was founded in 2016 as a Swiss investment boutique with the goal of offering personalized advisory and solutions, primarily to independent advisors in Latam, with a strong focus on structured products. Over time, they have expanded their asset offering to include investment funds, securitization, and, most recently, a bond line. The firm’s founding partner, Samir Lakkis, emphasizes that their objective is always to provide the best service and offer alternatives to those of major banks.
What drove you to create the brokerage firm?
When we started in 2016, our clients were mostly independent advisors in Latam. I came from institutions like Commerzbank and Leonteq, which covered this region with structured products, but in some cases they stopped doing so, and the offering became limited. So we thought that, given the clients’ needs, we could provide them access to major banks with high-quality structured notes. We grew gradually: 2021 was a key year because it was very positive for the whole sector. But in 2024, we made another big leap, this time for internal reasons—due to the company’s stability and maturity, with very low staff turnover. Over the years, I’ve learned that stabilizing a team and keeping it consolidated is uncommon in a brokerage firm, and it has given us more security as a company, allowing us to grow in volume.
Who are your main clients?
We started with smaller independent advisors, like the typical banker who has worked in Switzerland for years, decides to go independent, moves to Latam, and manages between 50 and 300 million dollars. From there, we kept growing in both client types and geographic coverage. We started serving slightly larger clients, like multifamily offices, single family offices, or local banks, and expanded our coverage from Latam to Switzerland, the Middle East, Israel, and South Africa. Recently, we’ve started gaining more institutional clients, such as pension funds. But the core business remains independent advisors.
Did you choose Madrid as one of AIS’s six offices because of its ties to Latin America?
Yes. The headquarters is in Geneva, but the Madrid office has grown significantly. We opened in Madrid because, unlike what happened 10 years ago, Madrid has become an alternative to Miami for Latin American clients and advisors. Although they still hold many assets in Switzerland, clients no longer go there to see their banker.
You started with structured products, but have also expanded to investment funds and securitization. What’s the company’s product structure like?
Structured products are still the core. Last year, we distributed more than 4 billion dollars in structured products across 30 countries. But we saw that we could offer clients other products, which led to a distribution agreement with Nomura, active in Argentina, Uruguay, and Panama, to help asset managers access Latam. We also offer asset securitization, for which there is strong demand.
Can you talk about each of these pillars?
90% of the products we create come from client demand—the advisors, each with their own point of view. We work to get the best terms based on their vision. As I mentioned, structured products remain the core business. With funds, we’re doing very well with Nomura, which is a strong player in fixed income, and Indian and Japanese equities.
Securitization is where we’re growing the most, because I believe alternatives are expanding. They’ve taken a while to arrive, but it finally seems like they’re here to stay among our private banking clients. Giving advisors tools so they can create their own alternatives—like taxi licenses in Colombia, artwork, or real estate—is very interesting. We create the structure so that, going back to the previous example, a group of 10 clients can buy thousands of taxi licenses without having to do it one by one. We set up a structured product, an SPV, that issues a certificate, and that certificate is what purchases the taxi licenses in Colombia. It’s about packaging something you can’t buy from a bank account, into a product you can buy from your account.
You’ve also recently ventured into a bond line…
Yes, we started bond trading, also as a response to client demand. Just like with structured products, it arose as an option to offer them a better product.
Which sectors do you see as attractive in the coming months?
After many years where everyone was focused on growth and not so much on value, we’re now seeing a shift from the U.S. to Europe, which we hope will continue.
Are there differences in client demand by country or region?
I think it relates to the origin of the wealth. In both Latam and the Middle East, it’s entrepreneurs who have built their own wealth—not inherited it over four generations—so they’re much more willing to take risks. That’s why there’s a greater appetite for alternative products, higher coupons, more aggressive strategies. In Europe, they lean a bit less toward alternatives and more toward fixed income. In Spain specifically, there’s a strong focus on funds due to tax benefits.
It was quite a show: U.S. President Donald Trump announced his sweeping tariff policy flanked by whiteboards filled with figures and names. The first reactions varied: Mexico and most Latin American countries felt the blow wasn’t as bad as expected, while Europeans expressed astonishment at the “punishment” coming from a supposed ally. Analysts agree on one thing: this is just the beginning.
Reciprocal Tariffs, Universal Tariffs: Making Sense of It All
From the televised charts to actual figures, there’s a long road—and analysts are trying to gauge the scope of this shift in the foundations of global trade.
For Mexico and Canada, the worst-case scenarios didn’t materialize: the list of so-called “reciprocal” tariffs did not include the U.S.’s trade partners under the USMCA. In Mexico’s case, this means that products complying with the agreement will continue to face 0% tariffs, while non-compliant products will now be hit with a 25% tariff.
However, measures under the International Emergency Economic Powers Act (IEEPA), targeting fentanyl and migration, remain in force, according to the White House. This leaves both Mexico and Canada exposed to further Trump sanctions. On top of that, sector-specific tariffs—on steel or automobiles, for instance—are still on the table.
So what does a “universal tariff” actually mean? For now, institutions like Barclays have made average estimates and suggest the new scheme amounts to a global 20% tariff—“the most extreme scenario the market had contemplated so far,” according to a report by Argentine firm Adcap.
Beyond Mexico, most Latin American countries have been hit with a reciprocal tariff of 10%. To put that in perspective, a country like Argentina had a 2.5% tariff rate before April 2. That’s now quadrupled.
Leonardo Chialva, portfolio manager and partner at Delphos Investment, breaks it down: “We can split this into two parts: a general 10% tariff for all countries, and extra tariffs for 60 so-called ‘abusive’ nations. The first seems to be a foundational move aimed at implementing a fiscal adjustment plan financed through a massive tax on all imports (with some exceptions). The second appears to be a negotiation tactic to ‘level the playing field’ in international trade.”
“Some analysts have suggested that the ‘extra’ tariffs were calculated using a simplistic formula: applying the ratio between the U.S. trade deficit with a given country and its total imports from that country. In other words, those exaggerated rates might not be based on any real analysis of tariffs or trade imbalances,” Chialva adds.
Waiting for a Reaction in Samarkand
Even geopolitics can have poetic moments. European Commission President Ursula von der Leyen was attending the EU–Central Asia summit in the fabled city of Samarkand, Uzbekistan—an event she referred to as “Liberation Day.” From there, she noted the EU would assess the impact of the new 20% tariffs and explore negotiation channels.
China, which faces a 34% “reciprocal” tariff on top of sector-specific ones, initially responded with restraint. As of press time, it had not announced any retaliatory measures.
Brazil, on the other hand, issued an official protest—despite some financial analysts seeing opportunities in the reshuffling of global trade.
In a joint statement, Brazil’s Ministries of Foreign Affairs and of Development, Industry, Trade and Services said the move “violates the United States’ commitments to the World Trade Organization and will impact all Brazilian goods exported to the U.S.”
The statement also questioned the U.S. justification of seeking “trade reciprocity.” According to U.S. government data cited in the same statement, the U.S. had a trade surplus of $28.6 billion with Brazil in 2024, when including both goods and services.
Liberation Day or Recession Day?
In the U.S., Trump’s policy is far from receiving unanimous support. Democrats went for an easy rhyme and dubbed the day “Recession Day.”
A special report by Argentine firm Adcap highlighted a key point: tariffs are taxes on imports. While historically a major source of U.S. government revenue, they now account for less than 3% of federal income. With his new package, Trump aims to raise up to $700 billion annually—almost nine times more than current tariffs generate.
Fernando Marengo, chief economist at BlackToro (a Miami-based RIA of Argentine origin), argued: “The notion that tariffs have significant revenue-generating power is misleading. U.S. imports represent less than 15% of GDP. Applying a 10% tariff across the board would yield only 1.5% of GDP. Some countries have higher tariff rates, but even so, the impact on the deficit would be minimal, because taxing imports affects both volume and prices, further reducing the real impact. Tariffs are a one-time adjustment—they change relative prices. They make imported goods more expensive compared to local goods, which discourages consumption and encourages domestic production. But the capacity to ramp up production in the short term is limited.”
Marengo concluded: “The U.S. is destined to run external deficits as long as the dollar remains the world’s reserve currency. Whenever the world needs liquidity, the only one who can provide it is the Fed. In return, the U.S. demands goods. That imbalance—between global demand for dollars and U.S. demand for goods—automatically creates a trade deficit.”
Opportunities in a Global Realignment
Some Mexican analysts view the tariff shock as a potential opportunity: reduced trade with the U.S. may open market space for others.
Latin American countries are turning their gaze to Asia. Brazilian equity chief Rodrigo Moliterno, of Veedha Investimentos, believes Brazil could benefit indirectly from the new U.S. measures. “Asian economies will likely look to Brazil as an alternative for trade or sourcing, instead of dealing with the U.S. under this new tariff regime,” he said.
Financial advisors and employees at Morgan Stanley Wealth Management will be required to be in the office at least four days a week starting May 5, according to an internal communication sent to staff on Monday, which Funds Society has seen.
“Much has changed since the height of COVID,” began the memo, signed by Jed Finn, Head of Wealth Management at the investment bank. “What hasn’t changed, however, is that the vast majority of us do our best work when we’re together in person,” he added.
In another section, Finn emphasized that the success of the business depends on personal relationships and the informal interactions that happen when people share the same space. The note also stated that supervisors are expected to be in the office five days a week unless they have an approved exemption.
Financial firms have been assertive in demanding employees return to the office after the pandemic began affecting the U.S. in 2020, leading to more flexible work policies and the widespread adoption of remote work.
Although Finn acknowledged in his message that “there’s a lot of passion on all sides of this issue,” he maintained that “to continue growing the business and ensure we meet our goals—not just for the current team, but for the future—we believe spending more time together in person will improve our effectiveness.”
In 2022, Morgan Stanley limited remote work to 90 days a year with no exceptions. In January, JP Morgan asked its hybrid employees to return to the office five days a week starting in March, sparking hundreds of comments and complaints from staff, according to Reuters.
Finn’s note also indicated that exceptions might be considered. “We know that in an organization of our size, with a diverse mix of businesses, locations, and roles, there will be situations where more flexibility in work arrangements is required—or even preferred,” he wrote. “With manager and/or advisor approval, those situations may continue,” he added.
