In the last 5 years, the Mexican mutual fund industry's Assets Under Management grew 9% in dollar terms, while the Afores (Public Pension Funds) grew 31% in the same period. It is noteworthy that in the period the peso lost 40% versus the dollar, which was one of the main reasons there was only a single digit growth.
According to the regulator (CNBV) as well as industry information (AMIB), the mutual funds companies manage US$ 112 billion through 567 mutual funds. There are little more than 2 million contracts divided between 29 intermediaries. The three largest participants account for 56% of the market and the 10 largest participants have a combined 90% market share. The three largest are bank related entities, with more than 10% market share each. These three are: Banamex with 25% of all AUM, BBVA Bancomer with 19% and Santander with 12% as of the end of 2015. In the last 5 years Banamex increased its market share 0.5%; while BBVA's decreased by 4% and Santander also saw outflows equivalent to 1% of its AUM.
While there is still a strong interest, from both locals and foreigners, to enter and increase their presence in the mutual fund industry in Mexico, reviewing the figures for the last five years, the most important changes come from GBM which added an extra 2% market share to their AUM, to settle with 4% market share and in ninth place; and the case, already mentioned, of BBVA Bancomer whose market share fell from 23 to 19%. The rest have small variations of plus or minus one percent.
In addition to the above, the entities that stand out are Banorte IXE (on 4th place with a 7% market share) with an increase in market share of 1.2%; Actinver (5th place with 6% market share), Finaccess with 0.8% (15th place with 1% of the market); and Principal (13th place and 1% of the market) with an increase of 0.6% over five years.
Although the number of debt and equity funds offered is very similar (280 debt funds vs 287 equity funds for a total of 567 funds at December); the distribution by assets class is not the same: 73% of assets are in debt funds while only 27% are in equity funds.
Reviewing the composition of the assets between debt and equity funds of each intermediary we observe some specialization. Managers with more than 90% of its assets invested in debt funds are: Nafinsa (98%); CI Fondos (98%); Intercam (96%); Monex (95%); HSBC (93%); Mifel (92%); Vector (91%); Invex (90%); and Multiva (90%). Those with more than 60% of its assets in equity funds are: Valmex (70%); GBM (65%); Inbursa (59%) and Finaccess (59%).
It is estimated that management fees average 1.12% in Mexico with debt funds fees are around 1%, while funds fees ranges between 1.5 and 2%, on average.
Reviewing the five years figures, one concludes that the fund business in Mexico is a long term one and where participation slowly grows.
Arturo Hanono is an institutional asset manager in Mexico. He has more than 30 year's experience in the Asset Management world, of which 15 he spent as a private banker and in the last 18 years has been CIO in several Afores. He has a degree in Economics from Universidad Anáhuac (1983). For his professional thesis, he won first place in the National Stock Market Prize organized by the Mexican Stock Exchange in 1985.
You can find him at firstname.lastname@example.org