{"id":14661,"date":"2015-05-12T16:34:09","date_gmt":"2015-05-12T21:34:09","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=14661"},"modified":"2015-05-12T16:37:18","modified_gmt":"2015-05-12T21:37:18","slug":"asset-managers-eye-latin-america-middle-class-for-growth","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/asset-managers-eye-latin-america-middle-class-for-growth\/","title":{"rendered":"Asset Managers eye Latin America’s middle class for growth"},"content":{"rendered":"

By Yimian Wu<\/p>\n

Asset managers operating in Latin America hope to claim a bigger share of the growing mutual fund market, currently dominated by local banks, with more sophisticated equity products, said fund managers in the annual conference of the Chartered Financial Analyst (CFA) Society Chicago<\/a> on Thursday.<\/p>\n

Mutual funds operated by the local banks invest primarily in fixed income securities\u00a0and local markets, conference participants said,\u00a0so people in\u00a0the emerging middle class\u00a0are looking for alternative investments for their retirement funds.<\/p>\n

There is significant room for growth in mutual funds in Latin America, said Lucas Ramirez, head of research at Sura Investment Management. According to him, although the region had only 2.5 percent of global assets under management in 2013, growth of managed assets\u00a0in the past six years has been around 13 percent annually compared to a global average of around 6 percent.<\/p>\n

<\/p>\n

Ramirez said Latin America started to implement mandatory defined contribution plans, similar to 401(k) plans\u00a0in the United States, about 30 years ago. Today, ten countries have adopted these plans and total assets under management\u00a0exceed $100 billion.<\/p>\n

However, penetration of mutual funds is low in the region, Ramirez stated.\u00a0\u201cYou don\u2019t find Latin American mutual fund-based companies like Blackrock, Fidelity and Vanguard. It is an industry that is dominated by the banks and by the brokers just because they have the customers and the distribution channels, therefore they create asset management subsidiaries just as an add-on products,\u201d he said.<\/p>\n

He also noted that the assets are \u201cconservatively managed\u201d so that, among different countries, fixed income accounted for 75 to 87 percent of total mutual fund investments and local exposure ranged from 77 to 100 percent.<\/p>\n

Ned Burmeister, senior vice president of Principal Financial Group, aims at transitioning the middle class investors \u201cfrom savers with bank-offered products, fixed-income products, to more mutual funds, solution-based products and participating in the capital markets.\u201d<\/p>\n

Burmeister also said that the defined-contribution programs will not provide adequate income for a comfortable retirement life and therefore his company is trying to shift people from mandatory programs to voluntary\u00a0plans with more flexibility.<\/p>\n

He also noted a\u00a0trend of declining rates of return on fixed income investments in Latin America, saying \u201cit is driving the necessity for participation in the equity market and participation in the solution-based mutual funds.\u201d<\/p>\n

Manuel E. Mejia-Aoun, founder of Alpha4X Asset Management, declared that technology helps form a \u201cglobal middle class affluent society\u201d\u00a0in which\u00a0investors from different countries can share information and educate each other to become more mature investors.<\/p>\n

Photo at top: Raman Aylur Subramanian, Ned Burmeister, Lucas Ramirez and Manuel E. Mej\u00eda-Aoun talked about asset-management opportunities and challenges in Latin America. (Yimian Wu\/Medill)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Yimian Wu Asset managers operating in Latin America hope to claim a bigger share of the growing mutual fund market, currently dominated by local banks, with more sophisticated equity products, said fund managers in the annual conference of the Chartered Financial Analyst (CFA) Society Chicago on Thursday. Mutual funds operated by the local banks […]<\/p>\n","protected":false},"author":139,"featured_media":14663,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,436],"tags":[],"class_list":["post-14661","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-spring-2015"],"yoast_head":"\nAsset Managers eye Latin America's middle class for growth - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/asset-managers-eye-latin-america-middle-class-for-growth\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Asset Managers eye Latin America's middle class for growth - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Yimian Wu Asset managers operating in Latin America hope to claim a bigger share of the growing mutual fund market, currently dominated by local banks, with more sophisticated equity products, said fund managers in the annual conference of the Chartered Financial Analyst (CFA) Society Chicago on Thursday. 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