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A Strategic Positioning of Chilean Alternative Securities Investment Using Factor Analysis

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  • Alberto S. Ocaranza Figueroa

    (Ph.D. student in Business at AIIAS.)

Abstract

The research analyzed the investment strategies of Chilean investors, focusing on the factors influencing their choices between money market, mutual fund, bond investments, and equity market options. As a key emerging market in Latin America, understanding these strategies is essential—especially in light of recent economic fluctuations and inflation concerns. Utilizing XLStat for factor analysis, the study examined data spanning from 2013 to 2023, sourced from the World Bank, the Chilean Central Bank, and financial institutions such as the Santiago Stock Exchange (SSE). A team of experienced economists provided Delphi ratings to assess investor preferences across various asset classes, enabling the identification of key drivers like attractive yields, stock index growth, and risk-return tradeoffs as pivotal in shaping these decisions. The analysis reveals a preference for conservative investments, particularly in uncertain periods, with bonds and bank deposits favored over equity investments. Should equity outcomes fall short, strategic shifts indicate an aggressive stance on mutual funds, competitive investment in foreign exchange, conservative positioning in bonds, and a defensive approach via bank deposits. The study concludes that fostering innovation in Chile’s equity and alternative securities markets is vital for supporting economic resilience and growth. Recommendations emphasize increasing the competitiveness of the SSE, broadening third-party bank financing, attracting high-net-worth investors to Chilean mutual funds, strengthening foreign exchange transactions, and advancing the private sector equity trading to drive sustainable economic progress.

Suggested Citation

  • Alberto S. Ocaranza Figueroa, 2024. "A Strategic Positioning of Chilean Alternative Securities Investment Using Factor Analysis," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(15), pages 33-46, November.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:15:p:33-46
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    References listed on IDEAS

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