Principal Funds: Diversification, the key to absorbing volatility shocks

Principal Funds: Diversification, the key to absorbing volatility shocks

Understanding the current economic context is essential to choose a good strategy, an investment that is diversified and that is reflected in the returns, as considered by the experts at Principal Financial Group Mexico, after being recognized by morning star in the category of Best Mexican Equity Fund.

In an interview for The EconomistOmar Morales, Director of Investments at Principal Fondos, pointed out that the award received by PRINRVA FA is a recognition of the effort and consistency they have had in their investment strategy, but also of the teamwork that has been carried out in the last five years.

“The award is recognition of the effort and discipline followed by the investment team in terms of consistency in delivering results. The portfolio of the winning fund has achieved that consistency in the last five years of generating a return, in a process where we focus on risk management, but also on ensuring that our clients can obtain a risk-adjusted return above of the benchmark indices,” says Morales.

“What this fund has achieved is a solid delivery of more than 500 basis points or 5% in this five-year window since we as a team have been working together.”

For his part, Oscar López, head of equity strategies at Principal Fondos, explained that the award-winning fund is made up entirely of shares of Mexican companies listed on the Mexican stock exchange that are well positioned in the market.

“It is a strategy that has worked satisfactorily for us for many years, since what is sought is to invest our clients’ capital in the best companies for the economic context in which we find ourselves, clearly the economic context is very dynamic and it is constantly changing and understanding this is fundamental in the investment process”, he pointed out.

Finally, the directors agreed that because the economic context is constantly changing, with events such as the pandemic, inflation or wars, the key is to have a well-diversified portfolio that can absorb volatility shocks, in addition to knowing how to take the opportunities that arise. they show up.

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