- Onate: "we are launching 4 international equity ETFs so that Mexican investors can invest in shares of companies in the United States, Europe and Japan without exchange rate volatility"
- "In times of volatility, there are things that we can control"
- A year ago they launched international fixed income products
BlackRock has developed an innovative range of products with currency hedging to Mexican pesos.
"A year ago we launched international fixed income products and now we are launching 4 international equity ETFs so that Mexican investors can invest in shares of companies in the United States, Europe and Japan without exchange rate volatility," explained Giovanni Onate, Director of the Institutional Segment at BlackRock in Mexico.
The 4 ETFs are:
- CSPXX – US Equities (S&P 500)
- IJPAX – Japanese Equities
- CEUX – European Union Equities
- IMEAX – Developed Europe Equities
Another advantage that Onate highlights is that the products have the UCITS structure, so the cost to the Mexican investor is attractive.
"We are expanding the universe of options so that the Mexican investor has access to instruments through which they can materialize their investment perspective, including the exchange rate variable. As trustees to our clients, it is part of our obligation to help our clients navigate stormy waters, not just calm ones, "he added.
According to Onate, the current scenario presents important challenges for large institutional investors.
Volatility has increased dramatically, with the VIX index rising to levels close to 12% in February, above 80% in March, and currently at 35%. This volatility has been even greater in emerging countries, where currencies have depreciated significantly against the dollar, as is the case in Mexico, where the peso has depreciated more than 30% in less than a month.
"In Mexico, for example, Afores have 80% of their assets concentrated in Mexico, which limits the possibility of accessing the benefits of a more resilient portfolio with greater international diversification. Furthermore, one of the key factors in the Investment in international assets is the level of the exchange rate and exchange rate volatility. An investment in an international asset that has performed well in a given year, but that currency of that asset has depreciated through the Mexican peso, will affect our performance in Mexican pesos," concludes the manager, who considers that "in times of volatility, there are things that we can control."