Abstract

RODRIGUEZ-REYES, Luis Raúl; SAMANIEGO, Ángel  and  PASILLAS, Mireya. Strategies in Retirement Fund Selection in the Mexican Retirement Market 1997-2018. Rev. mex. econ. finanz [online]. 2021, vol.16, n.spe, e657.  Epub Sep 05, 2022. ISSN 2448-6795.  https://doi.org/10.21919/remef.v16i0.657.

Objective: This research studies individual investment strategies that can be employed by Mexican workers to choose a retirement savings company, to provide evidence that can guide workers and governments in their pursuit for a higher replacement rate. Methods: To accomplish such task, more than 200,000 individual decisions in rolling-windows are simulated, based on more than twenty-years of market prices on retirement funds in Mexico (1997-2018). Outcome: Results indicate that contrarian-based strategies dominate momentum-based strategies in three out of four categories of funds. Recommendations: Moreover, in two out of four categories of funds the highest return is reached by the system’s average, calling for the introduction of an ETF-type of product to the Mexican financial market. Originality: The novelty of this research resides in the perspective of the analysis, positioning the Mexican worker in the role of an investor making a financial choice. Conclusions: The maximum average return is the best way to select a retirement fund manager when there is a guaranteed minimum pension, which acts as a risk-hedge, as it is in the Mexican case.

Keywords : AFORE; Contrarian Strategy; Defined-Contribution; Momentum Strategy.

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