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The Family of Retirement Funds Statistics and the current position of investments in Mexico

The Family of Retirement Funds Statistics and the current position of investments in Mexico The Siefores family scheme. Lic. Francisco González Almaráz President, Amafore 19th May, 2006. Mar.06. 10,930,510. 35,632,117. D e c.05. 10,809,622. 35,276,277. 33,316,492. D e c.04.

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The Family of Retirement Funds Statistics and the current position of investments in Mexico

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  1. The Family of Retirement Funds • Statistics and the current position • of investments in Mexico • The Siefores family scheme Lic. Francisco González Almaráz President, Amafore 19th May, 2006

  2. Mar.06 10,930,510 35,632,117 Dec.05 10,809,622 35,276,277 33,316,492 Dec.04 9,935,645 Dec.03 9,173,574 31,398,282 Dec.02 8,353,231 29,421,202 7,051,420 Dec.01 27,459,031 Dec.00 7,367,681 25,212,637 5,977,171 Dec.99 21,571,674 20,149,340 Dec.98 6,861,666 Dec.97 - 11,188,114 Total number of accounts Affiliated Accounts Assigned Accounts Concentrating Account Accumulated Data Source : Consar

  3. Mar. 2006 54,931 54,195 Dic. 2005 Dic. 2004 41,607 35,254 Dic. 2003 31,000 Dic. 2002 26,611 Dic. 2001 16,841 Dic. 2000 11,084 Dic.1999 5,501 Dic.1998 - 10,000 20,000 30,000 40,000 50,000 60,000 Total resources under management Note: Figures in millions of US$, exchange rate FIX for the close of each period. Source: Consar, at 31stMarch 2006.

  4. 0.60% 2.45% 0.17% 3.23% 4.27% 6.12% 18.18% 6.80% 19.54% 17.35% 12.29% 16.67% Composition of investment portfolio by instrument Amount Instrument % Bondes 10,733 19.54% Bonds 9,989 18.18% Other government securities 9,156 16.67% Private Paper 6,750 12.29% Udibonds 5,318 9.68% CBIC 3,734 6.80% Cetes 3,361 6.12% Equities 2,345 4.27% CFE and PEMEX 1,776 3.23% Securities held Abroad 1,348 2.45% Municipal 329 0.60% PIC 92 0.17% Total $ 54,931 100.00% Source: Consar, figures at 31st March 2006. Figures in millions of US$, exchange rate of 11.0421 pesos per US$.

  5. Resources of the Mexican Pension System Voluntary Payments 183 Sub-account of Retirement, Unemployment Late in Life and Old Age 54,931 54,748 10% GDP 81,536 Housing Sub-account 26,605 Figures in millions of US$ at end of March 2006, exchange rate: 11.0421 pesos per US$.

  6. 15.46% 15.15% 16.00% 14.27% 14.00% 12.95% 12.00% 10.69% 10.00% 8.42% 8.00% 6.00% 5.01% 4.00% 2.00% Basic Siefore Basic Siefore 1 TIIE 28 d CETES PRLV 28 d CPO´S Checking accounts 2 28 d Comparison of Yields Note: Nominal annual yields from July 1997 to March 2006

  7. Siefores Family Scheme

  8. Current Situation SB1 SB2 - In debt instruments 100% • Inflation-protected debt • instruments 51% • Risk Parameters • - Risk Value 0.60% - In debt instruments 100% • Equities Indexes 15% • Risk Parameters • - Risk Value 1% Basic Siefore 1 and 2: - Inter-related Companies up to 15% - From a single issuer: AAA 5% AA 3% A 1% • Diversification • AAA 100% • AA 35% • A 5% • International Values 20% • Possibility of operating Siefores with voluntary contributions under the SB1 system.

  9. 35.00% Nominal Yield 12 months SB1 29.38% 26.73% 30.00% Real Yield 12 months SB1 25.00% 21.11% 16.97% 20.00% 15.40% 10.25% 15.00% 10.91% 9.31% 10.00% 5.89% 11.79% 7.30% 10.79% 5.00% 7.75% 5.20% 7.08% 5.85% 1.50% 3.60% 0.00% 1998 1999 2000 2001 2002 2003 2004 2005 2006 12-Monthly Yields for Basic Siefore 1 The real accumulated yield of Basic Siefore 1 from 1st July 1997 to 31st March 2006 is 6.84% 12-monthly yields at March each year for the period 1997-2004 show the data of the Basic Siefore Source: Consar

  10. Nominal Yield for 12 months SB2 35.00% 29.38% Real Yield for 12 months SB2 26.73% 30.00% 21.11% 25.00% 16.97% 15.40% 20.00% 12.17% 10.25% 15.00% 9.31% 5.64% 10.00% 8.52% 10.79% 11.79% 5.00% 7.75% 7.08% 5.85% 5.20% 3.60% 1.26% 0.00% 1998 1999 2000 2001 2002 2003 2004 2005 2006 12-Monthly Yields for Basic Siefore 2 The real accumulated yield of Basic Siefore 2 from 1st July 1997 to 31st March 2006 is 7.13% 12-monthly yields at March of each year Source: Consar

  11. Development of the Siefores Family • Implementing a Siefores family allows greater freedom to provide workers with a • variety of different investment products by offering different options in the • composition of the portfolios. • Different risk profiles for members with different characteristics. • Different weightings in terms of the asset classes that are authorised. • Portfolios with exposure to different currencies. • A broadening of the range of services that an Administrator can offer, • through the different Investment Companies it deals with. • In order to achieve this type of fund management, it is necessary to have • differentiated Investment Schemes for each type of Fund. • These measures would bring the investment incentives of the funds into line • with those of their members.

  12. Yield Siefore n Siefore 2 Siefore 1 Risk Development of the Siefores Family Through the Siefores family, the worker will be able to choose between different risk-yield alternatives. Depending on age, years of contribution, risk profile, etc., the worker will be able to invest his/her resources in different Siefores. Below is a presentation of a possible Siefores Family Scheme, towards which the System in Mexico could progress.

  13. Development of the Siefores Family Siefore 1 Siefore 2 Siefore 3 Siefore 4 Siefore 5 Siefore "n" Moderate Average Risk Aggressive risk VaR For Slightly voluntary Between 3 Between 6 over one contributions, and 4 years and 7 years year Duration short, medium or long term, Close to the No Average permitted with some (Basic 1) (Basic 2) degree of limit Equities concentration In currencies, International Securities for specific According to the particular characteristics Instruments with groups, of the fund hedging for inflation etc. Debt instruments In local currency Funds with different, specific characteristics

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