The Mexican retail client is getting more and more diversified, according to Alejandro Aguilar Ceballos, CEO of Banorte’s asset management business.
“Last year we saw an almost six peso fluctuation in the exchange rate, and clients became more aware of the importance of diversification and having a more balanced portfolio,” he told Fund Pro Latin America.
Before even its purchase of Banco IXE in 2011, Banorte has mantained subadvisory deals. “That awareness, that you cannot operate all markets if you do not have a global alliance is part of our DNA,” Aguilar highlights. He believes that partnering with international asset managers via subadvisory deals “allows for competitive returns, and gives clients onshore diversification, a reason why last year we had very good results with our international offering.”
Banorte is the fourth largest asset manager in Mexico. Its assets under management grew by MXN 16 billion, or 8%, during 2020 to top MXN 191.2 billion (USD 9.6 billion). AUMs of internationally exposed products grew 14%, according to Aguilar.
So far, Banorte has subadvisory deals with AllianceBernstein, (NTEAI and NTEUSA+), BlackRock, (NTEINT+), Franklin Templeton (NTEESG, previously NTEGL), Lombard Odier (NTE4) and Vanguard (NTEDLS+). They also offer exposure to US investment-grade fixed income (APIDINT), US equities (NTEUSA), as well as currency hedges in USD and EUR (NTEDLS and NTEEURO).
“We have had a very positive balance with our partnerships, and we intend to keep them in place,” he said.
Regarding new offerings, Aguilar believes Banorte’s current product line is robust and given it also has open architecture, should be able to satisfy all its client’s needs. “We are very happy with our subadvisory deals, which we evaluate on a monthly basis. Of course, if performance were not satisfactory, we would then analyze how to replace the manager, but these are long-term relationships and everything is going very well now,” he said.
For Aguilar, “a subadvisory relationship is similar to that of a high-end car, where after-sales service is very important, as well as PR endeavors,” so he does prefer that the managers he works with have an onsite presence in Mexico.
One of the perks he highlights of these relationships is the ability to bring world-renowned-expert views to its clients. Last year, the firm had between 50 and 60 webinars featuring its subadvisors. “The fact that our clients can be exposed to the opinion and outlooks from these experts really open the range of options,” he added.
Banorte’s new ESG fund
In early February, the firm launched its first ESG fund, NTEESG. The fund is subadvised by Franklin Templeton and will have investments in between 100 and 150 international equities, “which are chosen with an ESG filter and purchased directly through the SIC,” said Aguilar. The fund will typically not have exposure to passive instruments such as ETFs and will be rebalanced every three months. Its underlying benchmark is the MSCI World Index.
“Being ESG should be part of all portfolios. It is not a fad or a passing trend, it is something that is here to stay. I think that investors, through advisers, have to have this type of investment, but I also feel that there is more and more evidence that investment in companies with ESG criteria achieve better risk-adjusted returns,” he concluded.
Related Posts
