Financial asset management in investments in Mexico shows signs of resilience, despite the adverse conditions that have prevailed for several months. That is the conclusion of SPIVA (short for S&P Indices Versus Active), a semiannual report from S&P Dow Jones Indices that compares the performance of actively managed funds with that of their benchmark indices. This study analyzes the performance of equity and fixed income funds over different time horizons (1, 3, 5, and 10 years).
The SPIVA report for Mexico was recently published, with data as of the end of the first half of last year, providing insight into how investors are managing both short- and long-term challenges in the Latin American country. According to the report, in 2024, difficult market conditions were present for active managers.
Thus, funds in the Mexican Equity category underperformed by 41.9% during the first six months of 2024, a figure that increased to 85.4% over a 10-year period.
The report also presents SPIVA’s initial analyses of two new categories of funds domiciled in Mexico: U.S. Equity and Global Equity. In the first half of 2024, 50% of U.S. equity funds denominated in pesos underperformed the S&P 500®, with underperformance rates of 85% and 86.7%, respectively, over the 5- and 10-year periods.
Meanwhile, Global Equity vehicles (in Mexican pesos) faced a more difficult first half of 2024, with 77.8% underperforming and 100% underperforming the benchmark index over the 5- and 10-year periods, respectively.
In Mexico, the S&P/BMV IRT index, the most important in the industry, started the year in negative territory and closed the first half of 2024 with a 7.2% decline. Meanwhile, the S&P 500 rose 24.2%, and the S&P World Index rose 21.2% in Mexican pesos during the first half, outperforming local equities.
The Mexican stock market offered broad opportunities for outperformance, but fewer than half of local equity funds outperformed the benchmark index in the first half of 2024. The performance of the S&P/BMV IRT was led by a few key contributors, resulting in a slight positive skew in stock returns, with an average drop of 5.1% compared to a median decline of 6%.
However, 56.8% of stocks outperformed the index during the first six months of the year. In a period when most stocks outperformed the benchmark, most Mexican equity funds took advantage of favorable market conditions for stock selection, with underperforming funds representing only 41.9% of the total during the first half of 2024.
