Looking Elsewhere
Mexican asset managers and their exposure to local equities.
In 2014, Mexican institutional investors held a position close to MXN $300 billion in local equity securities — a figure that represented over 70% of the total portfolio for equity-focused asset managers in the country.
Since then, investors have considerably reduced their exposure to the local market, driving down their portfolios’ weight from local securities to less than 30%.
When did this trend start and where have funds been directed since?
According to Banxico data, asset managers in Mexico held a position of over MXN $240 billion in local equity securities at the end of May — implying an aggregate exposure of 25% to the country’s stocks, ETFs and other local funds.
In this article, when we refer to asset managers we are only considering those classified as “equity-focused”.
During the past 10 years, exposure to the local market has been reduced by around 40 percentage points as institutional investors amplified their scope to the global market.
On the other hand, as of June of 2024, almost half of the MXN $980 billion in funds have been invested into foreign ETFs. Making it, by far, the most popular asset class for these funds.
Interestingly, around 60% of the investments in foreign ETFs would be concentrated amongst the top 10 instruments — with just 2 of them being primarily indexed to equity securities.