Returns on Savings Portfolio, as expected
The returns of the Savings Portfolios have been, as expected, in line with what we have been communicating.
The Savings Portfolios have been designed to replicate central bank interest rates with an optimized composition of money market funds that have this function. This is why we communicate that the Yield is variable, i.e., it varies as central banks raise or lower their official interest rates. For the Euro, according to the European Central Bank (ECB) or the US Federal Reserve for the dollar.
In the table above, we show the current Yields (variable) updated at the close of June 2024. The Yield in euros has decreased as of 12/06/2024 and is 3.35% minimum (3.53% maximum for more than 5 million). For the dollar version, the Yield is 5% (maximum 5.12%).
As can be seen in the table below, a client who had started investing in the EUR and USD Savings Portfolios on 11/30/2022 would have accumulated 4.6% (5.2% gross) or 7.7% (8.3% gross) respectively.
Important note: past performance is no guarantee of future performance.
Annualized yields (AER) have been 2.9% in euros and 4.8% in dollars. These Yields are obviously below the current Yield because the latter has been increasing as central banks have been raising rates.
Risk-adjusted returns that reach ratios of 6 in euros and 7 in dollars are impossible to achieve in other types of portfolios at this time.
Important note: past performance is no guarantee of future performance.
As can be seen in the graph above, one of the virtues of the savings portfolio is its predictability, i.e., the return accumulates almost constantly and has been steepening in recent months as rates have risen. Its volatility (see first table) has been close to 0%: specifically 0.5% for the Euro Savings Portfolio and 0.7% for the Dollar Savings Portfolio.
In the coming months, we may see a reduction in interest rates by central banks (the European Central Bank has already lowered official rates by 25 basis points in June and the Federal Reserve is expected to begin its cycle of cuts in September of this year). If so, we could see an inflexion in the yield curve, the pronunciation of which will depend on the magnitude of these reductions. Nevertheless, it is likely that, in the months and years to come, returns will remain positive. The savings portfolio will therefore continue to be one of the most attractive alternatives for both immediate savings and the management of an emergency fund.
Savings Portfolio yields clearly above deposit rates
Since we launched the savings portfolios, the return has always been higher than the interest rates of banks’ deposits up to 1 year and, on average, a client would have obtained 1.31 percentage points more, accumulating 4.30% (instead of the 2.98% that an average deposit would have accumulated) as shown in the graph below.
Important note: past performance is no guarantee of future performance.
As can be seen in the graph below, the Yield of the Savings Portfolio has been 1.5 times higher than the interest rate of time deposits up to 1 year during this period.
Important note: past performance is no guarantee of future performance.
