Since the election of Donald Trump Mexico has been through the grinder. Its currency plummeted as investors feared the Trump effect, its growth forecast was literally in the balance and the future of its lucrative trade deal with the US was also in jeopardy.
Fast forward a few months and things are looking a little rosier. The peso experienced the strongest currency rally this year, jumping almost 20%, and Mexico’s central bank has just lifted its growth forecasts for 2017 to up to 2.5% and up to a potential 3% for 2018.
The Trump effect still lingers though as the president’s Twitter feed has been laden with criticism of the talks with Mexico and Canada to renegotiate the North American Free Trade Agreement (NAFTA), creating a high level of uncertainty.
However, the past year has still seen fund managers post strong returns in the Mexican market.
Of the 22 managers tracked by Citywire who have been at helm of a Mexican equity fund over the last 12 months, 12 of them beat the average manager return of 11.5%.
Below are the top three within that list.
3. Alejandro Ovejas Busqueta – Inbursa
- Fund: Inburmex SA de CV SIRV B-1
- 1-year return: 14.72%
Kicking off our top three is the CEO of Mexican investment firm Grupo Financiero Inbursa, fund manager Alejandro Ovejas Busqueta/
Robles has been running his Inburmex fund since its inception in April 2016 which can invest in both Mexican stocks and local ETFs. According to its latest factsheet dated end of June, the fund’s largest sector allocation is towards the consumer market at almost 27%, followed by industrials (20.2%) and telecommunications (18.35%).
Among its top holdings are Mexican beverage company FEMSA, which operated the largest independent Coca-Cola bottling group in the world, telecoms firm America Movil and local bank Grupo Financiero Banorte.
2. Alejandro Diaz – Old Mutual Mexico
- Fund: Old Mutual Renta Variable Mexico SA de CV SIRV A
- 1-year return: 17.34%
Narrowly missing out on top spot by a mere half a percent is Old Mutual fund manager Alejandro Diaz. He has been running the Old Mutual Renta Variable Mexico fund since it was launched back in 2008.
Like his counterpart at Inbursa, the consumer sector is his fund’s single largest sector allocation at around 26%, followed by telecoms at 18% and industrials at 16%.
His largest stock holding is America Movil, accounting for 12% of his portfolio, while FEMSA is his second biggest company bet at just over 10%.
1. Arturo Hernandez – Sura México
- Funds: SURA Patrimonial SA de CV SIRV A/SURA Indizado SA de CV SIRV BOE2
- 1-year return: 17.86%
At the top of our ranking is Sura Asset Management’s Arturo Hernandez who has been running both his funds since August 2014.
His Patrimonial fund was initially launched at the end of 2013 while the Indizado fund was launched in 2010. Both funds have very similar portfolios, with only 1 or 2 percentage point differences in the amount they allocate to each of their top sector, namely consumer defensive, industrials, financials and cyclical consumer.
The largest of the two is Sura Patrimonial with 2.7 billion pesos ($151 million) in assets. In it Hernandez allocated over a quarter (27.6%) toward consumer defensive stocks, with industrials coming next with 23%.
Among the fund’s top holdings are, once again, America Movil, FEMSA, and Banorte as well as cement group Cemex and mining company Grupo México.