Equity strategy for global success, says Afore Banamex

Equity strategy for global success, says Afore Banamex


   Source: Walter Rodríguez  
Mexican pension fund manager Afore Banamex is confident that its investment strategy, which includes strong diversification into global equities, will help it ride out a tough period for capital markets investors, Rodrigo Blancas, its head of mandates, has told LatinFinance.

More than a quarter of Afore Banamex’s riskiest fund — dubbed category four, under the Mexican pension framework — is in stocks outside Mexico, a larger allocation than any other Afore.

“Our investment strategies haven’t changed,” Blancas said in relation to the difficult markets over the past year. “We remain positive on these types of asset classes, above all on equities compared to fixed income.”

But Blancas said the Afore was prepared to change course if a market event similar to the 2008 collapse of Lehman Brothers were to shake markets again: “The volatility [over the past year] hasn’t been large enough for us to change our investment strategy, above all because our clients are saving for the long term.”

Banamex was Mexico’s first pension administrator to allocate part of its portfolio to a third party asset manager, when it awarded a $400m mandate to Schroders last August. The mandate is for global equities. Since then, it has awarded a $470m mandate to the same manager to invest in European equities. The pension fund administrator is working on a third mandate to an outside asset manager, Blancas said in the May/June edition of LatinFinance.

Afore Banamex is not alone in shying away from global fixed income markets. Afore XXI-Banorte uses its investment diversification options as much as it can, particularly as bond prices fall in response to rising US Treasury yields, chief investment officer Ignacio Saldaña tells LatinFinance.

The fund takes a close interest in Mexico's infrastructure projects, for example. "The worries about the fixed income market have drawn us to participate more aggressively in other asset classes," he says. LF

See also: Institutional Wealth Mexico: Mandate for change in the May/June issue of LatinFinance