Credifondo SA SAF, Peru’s largest mutual-fund manager, has scaled back holdings of government debt as it wagers the country’s corporate bonds will provide better returns, Chief Executive Officer Augusto Rodriguez said.
The company sold sol-denominated government securities as yields fell to all-time lows, and increased purchases of corporate notes, which have been overlooked by foreign investors, Rodriguez said in an interview in Lima today.
Yields on the Andean nation’s bonds have fallen this year as foreign investors move money into what the International Monetary Fund expects to be Latin America’s fastest growing major economy this year and next. Credifondo has bought dollar-denominated bonds sold this year by Volcan Cia. Minera SAA, BBVA Banco Continental SA and Banco de Credito del Peru, which will outperform government debt with less volatility, Rodriguez said.
“Investors’ eyes have been more fixed on government bonds,” said Diego Marrero, the deputy investment manager at the Lima-based fund manager. “They’ve been looking less at corporates and this situation could be reversed in the coming months.”
The yield on the nation’s benchmark 7.84 percent sol-denominated bond due August 2020 fell two basis points, or 0.02 percentage point, to 5.17 percent at 3 p.m. in Lima, according to prices compiled by Bloomberg. The price rose 0.14 centimo to 117.53 centimos per sol.
The yield has fallen 59 basis points this year and touched 5 percent on May 3, the lowest since at least February 2006.
Credifondo is a unit of Credicorp Ltd., Peru’s biggest financial services company.