October 1, 2018

Morningstar Updates Analyst Ratings to 40 Investment Portfolios from Mexico’s Compulsory Pension System; Upgrades Siefores from Two Afores; Downgrades Siefores from Two Afores

The annual review of Mexico’s investment portfolios, Siefores, shows that many of the pension managers, Afores, continue to suffer from high investment team turnover, although some have made strides in retaining top talent

MEXICO CITY, Oct. 1, 2018 — Morningstar, Inc. (NASDAQ: MORN), a leading provider of independent investment research, today published updated Morningstar Analyst Ratings™ and comprehensive research for 40 of Mexico’s investment portfolios, or “Sociedad de Inversión Escpecializada en Fondos para el Retiro” (Siefores), offered by 10 specialized pension managers, or “Administradoras de Fondos para el Retiro” (Afores). The Analyst Rating for funds represents Morningstar’s conviction in the fund’s ability to outperform on a risk-adjusted basis over the long term. The five-tiered, qualitative Morningstar Analyst Rating™ scale has three positive levels—Gold, Silver, and Bronze—in addition to Neutral and Negative ratings.

Following the inaugural ratings of Mexican pension funds in 2017, Morningstar manager research analysts awarded four Silver ratings, eight Bronze ratings, 16 Neutral ratings, and 12 Negative ratings. To view the Morningstar.mx article and full list of Analyst Ratings for the 40 portfolios, please click here.

“In an industry that is seeing 12 percent growth over the last year and assets under management reaching MXN 3.4 trillion, Siefores continue to play a growing role in the retirement success of Mexican investors,” said Thomas Lancereau, director of manager research for North America. “We’re excited to help investors independently assess the Siefores available to them once again. This year, we made a few notable changes to the ratings. Our conviction in Afore Sura increased due to its deep resources and a robust investment process, lifting its Siefores to a Silver rating. Additionally, Afore Azteca was upgraded to Neutral from Negative based on its growing investment team and progress to enhance its investment process.

“Others have failed to adapt their investment process to the widened set of asset classes and investment tools approved by the regulating body, CONSAR, and operate with unstable or lean investment teams, resulting in the downgrade of the Siefores from two Afores: PensionISSSTE and Afore Inbursa,” said Lancereau.

Morningstar analysts rated four mandated Siefores offered by Mexico’s 10 Afores: Siefore Basica 1, SB2, SB3, and SB4.The Morningstar pillar ratings—People, Process, Parent, Performance, and Price—and the overall Analyst Rating are shown below:

Siefores*

People

Process

Parent

Performance

Price

Overall Rating

Azteca Siefores Básica 1, SB2, SB3, and SB4

Neutral

Negative

Neutral

Neutral

Negative

Neutral

Citibanamex Siefores Básica 1, SB2, SB3, and SB4

Positive

Positive

Positive

Positive

Neutral

Bronze

Coppel Siefores Básica 1, SB2, SB3, and SB4

Negative

Negative

Neutral

Neutral

Negative

Negative

Inbursa Siefores Básica 1, SB2, SB3, and SB4

Neutral

Negative

Neutral

Negative

Neutral

Negative

Invercap Siefores Básica 1, SB2, SB3, and SB4

Neutral

Neutral

Neutral

Negative

Negative

Neutral

PENSIONISSSTE Siefores Básica 1, SB2, SB3, and SB4

Negative

Negative

Neutral

Neutral

Positive

Negative

Principal Siefores Básica 1, SB2, SB3, and SB4

Neutral

Neutral

Neutral

Neutral

Negative

Neutral

Profuturo Siefores Básica 1, SB2, SB3, and SB4

Positive

Positive

Neutral

Positive

Neutral

Bronze

SURA Siefores Básica 1, SB2, SB3, and SB4

Positive

Positive

Positive

Positive

Neutral

Silver

XXI Banorte Siefores Básica 1, SB2, SB3, and SB4

Positive

Neutral

Neutral

Neutral

Neutral

Neutral

* The four investment strategies offered by each Afore received the same pillar and overall Analyst Rating.

All of the ratings and reports are available to the investing public on Morningstar.mx. An article introducing the Siefores evaluation methodology is available here along with three short, explanatory videos. A guide on how to interpret key data points in the report is linked here.

The research and ratings will also be available in Morningstar DirectSM, the company’s core investment research and analysis platform. More information is available here.

About Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of products and services for individual investors, financial advisors, asset managers, retirement plan providers and sponsors, and institutional investors in the private capital markets. Morningstar provides data and research insights on a wide range of investment offerings, including managed investment products, publicly listed companies, private capital markets, and real-time global market data. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than US$203 billion in assets under advisement and management as of June 30, 2018. The company has operations in 27 countries.

Morningstar's Manager Research Group consists of various wholly owned subsidiaries of Morningstar, Inc. including, but not limited to, Morningstar Research Services LLC. Analyst Ratings are subjective in nature and should not be used as the sole basis for investment decisions. Analyst Ratings are based on Morningstar's Manager Research Group's current expectations about future events and therefore involve unknown risks and uncertainties that may cause such expectations not to occur or to differ significantly from what was expected. Analyst Ratings are not guarantees nor should they be viewed as an assessment of a fund's or the fund's underlying securities' creditworthiness. This press release is for informational purposes only; references to securities in this press release should not be considered an offer or solicitation to buy or sell the securities.

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