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Hasenstab’s Funds hit by Argentine Peso Crisis

Templeton Emerging Markets Bond fund fell about 2.3% between August 29 and 30, according to Morningstar Direct, as the Argentine peso lost almost 15% of its value against the dollar.

The peso’s loss was triggered by investors reacting to the country’s request that the International Monetary Fund (IMF) speed up payouts on a $50 billion loan.

Year-to-date, Hasenstab’s fund is also down 6.68% , according to Morningstar Direct, with the peso falling 51% against the greenback over the same period.

The Argentine peso is among Hasenstab’s top bets, making up 14.6% of the fund’s currency allocation. Argentina is also his top country allocation, as he’s allocated 15.37% of his fund to the country’s bonds, according to Franklin Templeton data.

Templeton Global Bond, which had a 4.57% allocation to Argentina and 4.59% to the peso as of July 31, dropped about 1% between August 29 and 30. 

Hasenstab dialed up his Argentina bet in May when he snapped up $2.25 billion worth of Argentine bonds, reportedly becoming one of the country’s largest single creditors as Argentina grapples to contain both inflation and the fall of its currency.

On 2018-09-20, I checked with Templeton and here is how the EM currencies reacted to Argentina and Turkey crisis:

The take away message is: EM currencies had fallen below the crisis level in 2002 and 2009.

Reference:

Citywireamericas, Daniela Sirtori-Cortina, 2018-08-31, “Hasenstab’s EMD fund slides amid Argentine peso crisis”

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