Fitch Report: Mexican Bond Funds with the Highest Performance

Fitch Ratings' special report 'Bond Funds with the Highest Performance', identifies bond investment funds (BIFs) with the highest three-year compound annual return (3y-CAR) at the end of December 2014, based on a comparison between similar classifications and investment strategies. It also highlights 14 managers with the most high-performing DIFs.

The agency selected 194 BIFs that share three important elements: minimum history of three years, amount of assets under management equal to or greater than MXN100 million, and funds that belong to a peer group comprising at least five funds.

Fitch created 10 reference groups (RGs) for the analysis in order to classify the BIFs as homogeneously as possible. These groups are: Short-Term Government, Medium-Term Government, Short-Term Multi-Issuer, Medium-Term Multi-Issuer, Short-Term Repos, Long-Term Multi-Issuer, Long-Term Government, Short-Term Financial Institutions, Real Rate, and Foreign Currency.

At December 2014, 62 funds stood out for their high performance; their average 3y-CAR was 4.6%, which exceeds the average 3.4% of the total BIFs analyzed. The report's Appendix shows the 10 RGs with their respective BIFs, highlighting the highest performing funds.

Amongst the conclusions of the analysis, it can be noted that the longer the term of the fund (i.e. greater risk), the greater the return. Likewise, the Real Rate RG, whose investment horizon is mainly long term, shows the highest average 3y-CAR (5.8%). On the other hand, funds with a short- and medium-term investment horizon prevail, representing 73.2% of the total funds and 90.1% of the assets under management.