Inflationary crisis reduces yields of the Siefores, even with diversification

The upward trend in global inflation caused by border closures Both due to geopolitical problems and the effects on the production and logistics chains as a result of the Covid-19 pandemic, it has led to a constant rise in interest rates and the high volatility that international financial markets have experienced.

The above situation is directly reflected in the Investment Companies Specialized in Retirement Funds, better known as Siefores who have accumulated disabilities due to 473,800 million pesos at the end of the third quarter of 2022 and who have already accumulated six months of disabilities so far this year, according to data from the National Commission of the Retirement Savings System (eat).

When speaking of capital losses, it is explained by the decrease in the value of the assets in which the companies invest. outsideIn contrast, capital gains represent the increase in the value of assets in the markets.

For example, in the months of March, May and July 2022 they are the ones that have presented capital gains at the end of each month and the accumulated capital gains in these three months represent almost 185,000 million pesos.

The Siefores are focused on the long term and the portfolios include a great diversification of assets, seeking to reduce risks and obtain returns for when the pension arrives.

According to an Amafore document, “from 2016 to date, the capital gains obtained by the sector are equivalent to 1.23 billion pesos, which implies that around 1 out of every 4 pesos managed by the Afores have been generated in the last 6 years. . This despite the fact that not every month has been one of capital gains; the negative variations in the value of the Siefores’ assets are normal and inherent behavior given their proximity to the financial sector and the real economy”.

With respect to the assets managed at the end of 2021, the losses accumulated during this year of the Siefores represent 9%, while the Price and Quotation Index (S&P / BMV IPC) has decreased 16% compared to its level at the end of 2021 When comparing it with other markets, the difference is accentuated, such as: S&P 500 and Nasdaq 100, which accumulate drops of 25 and 33%, respectively.

Bernardo Gonzalez Rosaspresident of the Fores explained that this period of disability is not the deepest that has been seen since the Retirement Savings System (SAR), but it has been long, “in fact it is the longest for the Siefores Price Index, since it has 244 days.

So far this year, the Siefores price index has fallen 6.5% from the maximum reached on December 30, 2021, which compares with 20% of the fall that was registered in the financial crisis of 2008-2009 and with 22% that suffered in 2014.

The Amafore explained that a person who invested 10,000 pesos in the SAR in January 2008, at the end of August 2022, would have a total of almost 29,000 pesos; while a person who invested the same amount in the IPC would have 13,300 pesos less.

How do investment teams prepare?

On the other side of the coin, because asset prices are low, they can be purchased at lower prices. “Given the long-term strategy of the sector, it is expected that this acquisition at a low price will allow offering added value to Mexican workers,” according to the Amafore document.

For its part, Ignacio SaraleguiSenior Investment Strategist at Vanguard (the second largest asset manager in the world) said that they carried out an analysis of the value that Mexican equities can add to investment portfolios today, in order to provide greater diversification and protection against the current context of volatility and inflation. .

“Although the local market provides greater risk and volatility than the global market, the low correlation between the two and the diversification that Mexico provides to a portfolio with exposure to other assets, generates higher returns in historical models,” said Saralegui.

“In theory, we should take refuge in paper with floating rates, in Udibonos-type instruments or in gold, which can be a diversifier that should reduce inflation,” he said. Jose Oriol Boschdirector of the Mexican stock exchange during the CAnnual Summit of Indices and ETFsorganized by S&P Dow Jones Indices.

(With information from Ana María Rosas)

patricia.ortega@eleconomista.mx