Background on Mexican Pension Fund Managers (Afores)
Administered by the Comisión Nacional del Sistema de Ahorro para el Retiro (Consar), Afores manage the savings of formal workers throughout their working years, investing in various instruments to achieve returns and ensure a pension for retirement.
Currently, there are 10 Afores in Mexico. The largest by assets is XXI Banorte, with 1.48 billion pesos under management, closely followed by Profuturo with 1.47 billion pesos, and SURA with 1.25 billion pesos.
Increase in Domestic Equity Investments
According to Consar data, Mexican pension fund managers (Afores) increased their investments in domestic equities to 6.71% of their portfolios in August, up from 6.32% during the same period last year. This represents their highest level since May, when it was 6.77%.
This shift is driven by the strong performance of Mexican stock markets, with the S&P/BMV IPC rising 25.03% to 61,905.95 points and the FTSE-BIVA index gaining 23.26% to 1,238.55 points in 2025.
Factors Favoring Domestic Equities
Amin Vera, Director of Finances at Invala Family Office, highlighted two key factors driving the increased interest in domestic equities:
- Appreciation of the Mexican Peso: The strengthening peso against the US dollar benefits Mexican assets in international markets, as most institutional investors in the Mexican stock exchange are foreigners operating in dollars.
- Decreased Trade Tensions: The pressure from the trade war between the US and Mexico has significantly decreased. The market no longer perceives an imminent trade risk, whether through tariffs or a contentious renegotiation of the T-MEC.
Ariel Méndez, a bursátil analyst at Banco Bx+, noted that the preference for domestic equities in Mexico is now influenced more by Bank of Mexico’s interest rate cuts, which lower the returns on fixed-income investments and will continue to decline by year’s end.
Méndez also pointed out that, despite the extraordinary performance of the Mexican Stock Exchange, it remains attractive due to its financial valuation and fundamentals, allowing for further growth in the medium and long term.
Mixed Results Across Different Investment Categories
While Afores increased their domestic equity investments, they decreased their holdings in private Mexican debt from 13.75% to 12.42% of their investment portfolios between August 2024 and August 2025.
Investments in international equities (stocks from foreign exchanges) also fell from 14.48% in August of the previous year to 13.69%.
In structured instruments, investments dropped from 8.44% to 8.19%, while Fibras (Real Estate Investment Trusts) saw an increase from 2.56% to 2.99% of their portfolios.
The majority of Afores’ resources are allocated to Mexican government debt.
Government Debt Holdings
Approximately 51.62% of Afores’ investment portfolios are in government-issued instruments, such as federal development bonds (Udibonos), Certificados de la Tesorería de la Federación (Cetes), and others.
Key Questions and Answers
- What are Afores? Afores, or Administradoras de Fondos para el Retiro, are Mexican pension fund managers that manage the savings of formal workers during their working years, investing in various instruments to achieve returns and ensure a pension for retirement.
- Why are Afores increasing their investments in domestic equities? The increase is driven by the strong performance of Mexican stock markets, appreciation of the Mexican peso against the US dollar, and decreased trade tensions between the US and Mexico.
- What are the mixed results across different investment categories? While Afores increased their domestic equity investments, they decreased holdings in private Mexican debt, international equities, and structured instruments. However, they increased their investments in Fibras (Real Estate Investment Trusts).
- What percentage of Afores’ portfolios are held in Mexican government debt? Approximately 51.62% of Afores’ investment portfolios are in Mexican government-issued instruments, such as federal development bonds and Cetes.
