Between December 2015 and August 2016 (8 months) assets under management of Afores had a growth rate of 10%, which exceeds the growth in 2014 (7%). Assets under management ended August at 2,784,587 million pesos (mp) amounting to 148 billion dollars.
Half of the growth of 243,624 mp is explained by the bi-monthly contributions made by workers affiliated and the other half by the returns generated by the Siefores; however transfers between Afores (workers who decide to switch from one Afore to another); as well as the reallocation of accounts, helps growth in some cases. In the case of transfers between January and August 2016, 130,494 mp moved accounts and 31,500 mp were relocated last August.
Reassignment is a mechanism through which the CONSAR “assigns” temporary accounts of workers who do not choose Afore o the better performing ones, seeking to encourage the Afores to obtain better long-term returns/performance. The allocation and reallocation process was conducted under the rules issued in January 2015 where the following factors were considered:
- Increased net yield consistently as a central criterion in the process
- Additionally, those who made the greatest Afores registration effort workers
- Lower fees
- Effort to promote voluntary savings at theAfores.
Afores that won accounts in this process were those that have shown good performance in the net return indicator. It is noteworthy that the receiving Afores this year should keep a favorable yield performance in order to keep accounts in the following remapping process which will happen in 2017. Otherwise, those accounts would be reassigned.
In the first eight months of the year, Pensionissste, grew 21.2% in assets managed reaching 154,340 mp at end-August. Of this 1.2% came from Afores transfers and 3.2% from reassigning accounts. Pensionissste has 5.5% market share and in the last six years its market share has remained virtually unchanged (5.7% in 2010).
Afore Azteca is the second fastest growing in 2016 by presenting a growth of 17.1% which corresponds to 3.9% from transfers between Afores. From 2010 to date, Afore Azteca has doubled its market share rising from 0.8% to 1.6% with organic growth without purchasing another Afore. If they maintain these growth rates, in about three years they could reach Metlife (10th place). In the last two years Metlife has only grown 3 to 4% per year (3% in 2015 and 4% in 2016). Via transfers Metlife lost 2.1% and 3.0% was reallocated, which sums a drop of 5.1%.
Afore Coppel grew 17% even though they lost 0.7% in transfers. In recent years this Afore has been increasing its market share year after year. In 2010 it was of 2.5% and today, they have 5.3%. Coppel is just 4% away form Afore Principal who holds the No. 7 position, and only grew 2%. Afore Principal lost 2.5% market share to transfers and in reassigments it had a net outflow of funds of 4.1%.
Afore Banamex carries a 14% growth in the year, where 1.9% was due to transfers between Afores and 2.5% reallocation. Banamex was the Afore that achieved the highest growth amongst both areas. In March of 2013 when Afore XXI-Banorte acquired Afore Bancomer, the latter was 61.6% larger than Afore Banamex. Today, only three years later, this difference has shrunk to only 33.2%. If this trend continues, in three years we could see Afore Banamex back as number one, position that it occupied between 2002 and 2012. Afore XXI-Banorte has grown 4.5% this year, but the transfer between Afores (-0.6%) and reallocation (-1.6%) affected him with a 2.2% decline.
Accumulated in the year (eight months) Afore Sura and Afore Profuturo have had a very similar AUM’s growth: Profuturo with 12% and Sura with 12.1%. Sura is the third largest Afore with 15.1% market share and Profuturo fourth with 13.0%. Sura transfer in was 0.9% and reallocation 2.6% while for Profuturo was 0.8% transfer in and 1.4% reallocation. Currently Profuturo is 16% behind Sura, while Sura needs to gain 17% market share to reach Banamex.
Invercap this year only brings growth in assets of 4.3%. Transfer out was -2.6% and -3.5% reassignment for a total of -6.1% in outflows. Invercap’s organic growth has been notable. In 2010 it had 3.6% market share and today 6.4%.
Inbursa has had an accumulated growth this 2016 of 3.1% where the transfer out was -3.2%. In 2010 Inbursa’s market share was 8.6% and today is 3.7%.
As can be seen, with only a couple of years, we could see significant changes in the market share among Afores, even without considering any sale or merger between Afores, which could not be ruled out.
Column by Arturo Hanono