A CEDEAR does not always equal one stock or one ETF that, for example, is listed on the NYSE. There are equivalence ratios when comparing local prices with their quotation in the market of origin. Let’s give some examples: one Apple stock (AAPL) on the Nasdaq is equivalent to 10 CEDEARs on the Buenos Aires Stock Exchange, while for SPY, this ratio is 20. In other words, 20 CEDEARs are equivalent to 1 SPY in the U.S.A.

From CEDEAR quotations, you can see each equivalence ratio of one stock or of ETFs feasible for trading.

The price of CEDEARs will depend not only on the evolution of the underlying asset (the foreign stock or ETF), but also on the movement of the “Contado con Liqui (CCL)”. Consequently, the evolution of the gap between CCL and the official rate of exchange is captured by the price of the certificate in pesos. Therefore, they are useful assets to dollarize portfolios.

Then, the risks of investing in CEDEARs are – logically – the same as investing in stocks or the underlying asset that make up the ETFs, as the case may be. In this way, risks derived from the company itself, the market in general, and the economic situation are identified. Whereas, in terms of risks inherent strictly to the local market, we must undoubtedly mention liquidity. The volume of business concentrated in these instruments is lower than that of local stocks, and although there are several CEDEARs listed, few of them enjoy recommendable liquidity. In this sense, it is important – when making a purchase decision – to take into account the last time you traded and the average daily transactions.

While CEDEARs are foreign assets that are listed on the Buenos Aires market, ADRs (American Depositary Receipts) are their counterpart abroad; that is, Argentine stocks listed on foreign markets.

First, let’s take into account that an Exchange Trade Fund (ETF) is an investment fund managed by a portfolio manager that is listed as if it were a stock abroad, and whose objective is to replicate the performance of another asset such as indices, sectors, subsectors, commodities or any other instrument. Its management is usually passive, since an ETF portfolio manager usually seeks to replicate the behavior of the underlying asset. In fact, the main difference between an ETF and an Investment Fund is the way it works. Unlike investment funds, ETFs have quotations within the same day and operate (as we have already said) like a stock on the markets. In addition, unlike these, in Investment Funds, the portfolio management is usually active.