Investors are facing the “best opportunity” to bet on fixed income in the last decade. This is stated by the CEO and manager of the Buy & Hold firm, Rafael Valera, who defends that this market has an unprecedented volume of issuers of high credit quality with “offers returns close to double digits”.
During the presentation of the biannual letter, Valera highlighted that they have positions in 53 issuers, among which are Cajamar and Ibercaja, with a weight in their portfolio of 9% and 6%, respectively. The independent manager has highlighted the improvement in the solvency of the aforementioned cooperative group in recent years, with a delinquency rate that barely reaches 3%.
In this regard, he has revealed that the change in tone on the part of the central banks took them by surprise, with the “inverted portfolio”. Within fixed income, they opt for corporate debt, since they offer a return of around 7%, compared to government debt, which offers approximately 3.5%.
Regarding equities, Buy & Hold has highlighted its commitment to small capitalization companies. These are stocks that are trading so cheaply that you have to go back to the 2008 financial crisis to find similar prices. This reason leads them to keep track of the ‘small caps’ below 3,000 million capitalization. “It had been many years since we were so optimistic,” they point out.
This bet occurs after the corrections that technology companies have experienced and that have a great weight in their funds. Although it believes that these will maintain growth, its bump in the stock market has led them to modify the composition of the basket. After the sale of its position in Visa and the reduction of its shares in Paypal or Accenture, it has strengthened in CIE Automotive, Ryman Healthcare and Fluidra.
After the three with which it operates closed 2022 with negative returns, they are confident that their variable income portfolio will revalue up to 100% between now and 2025. So far this year, it has already increased by 15%. Of its three investment vehicles, B&H Equity has been the one that has fallen the most, with a collapse of 24.6%. B&H Flexible, for its part, has suffered a cut of 16.9%, while B&H Bonds has fallen by 8.6%.
