As part of WisdomTree's 7th anniversary in Mexico, and the launch of its first ETF designed exclusively for Mexican investors, Jonathan Steinberg, CEO of WisdomTree, Jose Ignacio Armendariz, partner and CEO of Compass Group Mexico, in partnership with WisdomTree, and Ivan Ramil, Director of Institutional Clients at Compass Group Mexico, spoke with Funds Society about their expectations and plans for the Mexican ETF market, which Steinberg says is "growing rapidly" and is key to expanding their presence in Latin America.
WisdomTree currently has approximately 45.1 billion dollars in assets under management (AUM) worldwide, of which 650 million come from the nearly 40 funds available in the Mexican market. With the launch of their newest ETF, the WisdomTree Global ex-Mexico Equity (XMX), the manager expects to double and maybe triple its AUM in Mexico. "This is the first time we have created a specific fund for the Mexican market. I hope it's the biggest fund in Mexico... We have been very successful with funds with exposure to Europe and Japan but I feel this will be bigger than all of them combined," said Steinberg. Armendariz mentioned that the index that the ETF replicates was created with the Afores (Mexican pension funds) investment regime in mind, in order not to exclude them, but that, in addition to the Afores, it is also directed to other institutional and retail investors. "It is an ETF with great liquidity, low commission and that provides exposure to the world in a single instrument" he mentions. Ramil added that they are "very excited about the product. We just finished a roadshow and feel it will be a great product for the Mexican market."
The XMX, which is traded on the Mexcan Stock Exchange's Global Market platform (SIC), replicates a market capitalization weighted index covering 90% of the elegible shares in the global market, excluding Mexico, and that meet the eligibility requirements of The CONSAR (Afore's regulator). The Index is calculated in US dollars, capturing 23 developed markets and 21 emerging markets, with more than 50% exposure to the United States. The most overweight sectors of the fund are financial, IT and discretionary consumption. The ETF is rebalanced every October, and includes minimum requirements for market capitalization and liquidity. It also sets sectoral limits to increase diversification.