Safe Bets Finally Pay Off for Carlos Slim's Pension Fund
(Bloomberg) -- As Mexican stocks put in their worst performance for a decade, the cautious investment strategy of a pension fund controlled by billionaire Carlos Slim’s bank is paying off.
Funds managed by Inbursa posted an average return of 4.7 percent this year, compared with 0.4 percent for the $164 billion pension fund industry as a whole, according to data from Bloomberg and the regulator Consar. Each of Inbursa’s funds have returned at least 3.8 percent year-to-date.
Rising Fed rates, the U.S.-China trade war and the arrival of left-wing populist Andres Manuel Lopez Obrador to the presidency have pushed Mexican assets down. Mexican stocks have fallen 15.5 percent this year, the worst performance since the economic crisis of 2008. In November, the fourth month of declines in Mexican stocks, Inbursa was the only pension fund to post positive returns.
"This is not the result of circumstances, this is about our long term strategy,” Marco Antonio Slim, the chairman of Grupo Financiero Inbursa SAB and the son of Carlos Slim said in a phone interview from Vail, Colorado. When you consider the low risk of our investments, Inbursa has been outperforming rival pension funds for four years, he said.
Inbursa has historically been the safest bet among Mexico’s pension funds, according to value-at-risk figures -- a popular measure of fund exposure to riskier assets -- posted by Consar. It is the second smallest of Mexico’s pension funds after Azteca, with 162 billion pesos ($8 billion) in assets.
"Nothing really matters until the retirement of a worker comes due, and we believe we offer the best risk-reward mix," Slim said.
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