From 2016, broker-dealer Davivienda Corredores has seen its assets under management (AUM) in mutual funds of listed securities grow at an annual rate of 36% – consolidating its position as Colombia’s second ranked brokerage company by listed AUM. Maria Teresa Uribe, who has been CEO of the firm since 2015, explains that this strong performance is down to “the implementation of 360-degree strategies, aimed at consolidating mutual funds as one of the pillars of growth of the brokerage company”.
Top level investment team
The success of Davivienda Corredores is built around an elite team of experienced portfolio management professionals, who are among the best in Colombia. Their collective experience has allowed the firm to develop internal quantitative tools, a detailed investment process, and a strict follow-up of its buy and sell discipline. These elements are responsible for the fact that the mutual funds managed by the firm have had risk-adjusted returns that are consistently above the peer average, as well as being above the benchmarks of almost all categories of mutual funds in which they participate.
Strong track record
Davivienda Corredores has an impressive track record in Colombia’s capital market sector. Highly regarded by its industry peers, it is the oldest mutual funds manager in the country.
In 2013, Corredores was purchased by Banco Davivienda, the second largest loan-offering bank in Colombia, and Davivienda Corredores was established. This acquisition took the brokerage firm into the big league, adding to the depth of investment expertise already present. Crucially, the Davivienda brand is one that is highly regarded by all Colombians who know that they have trusted partner for their financial journey.
Davivienda is owned by parent group Grupo Bolivar which is one of the largest business groups in Colombia, with over 75 years of experience and operations across many Latin America countries.
A focus on customer experience
Another major contributor to the growth of mutual funds is the firm’s steadfast belief in a fluid and straight-forward approach to the capital markets, one that delivers results on a consistent basis. Davivienda Corredores has therefore created a division within its mutual funds area to cut through the jargon, designing a unique communication strategy to unpack the technical language of the investment world into one that customers of all knowledge levels can understand. The initiative has generated new customers who previously didn’t invest in the capital markets, perceiving it as inaccessible and difficult to comprehend.
This strategy facilitates seamless communications throughout all market cycles, supporting both customers and the sales team, therefore generating long-term relationships based on trust and understanding.
Likewise, Davivienda Corredores offers DaviCash, a service designed by the company to simplify the treasury processes of corporate customers who invest in Interés, which is Davivienda Corredores’ Money Market Mutual Fund.
Davicash achieves this through a system that allows corporate customers to identify the individuals or organisations who have paid money to them by making transfers directly into the corporate’s Money Market mutual fund. Davicash also allows corporate customers to make large-scale dispersion of payments from their Money Market balance, through the entire network of Colombian banks and different banking correspondents.
The service has been implemented with such success that to date it represents 15% of the assets managed in the firm’s Money Market mutual fund. It also means Davivienda Corredores is not only a service-provider, but a strategic ally of this customer segment.
Democratisation of access to mutual funds
In order to provide access to investments within the local, and international capital markets for a wide range of customers, not just high-net-worth individuals, Davivienda Corredores has substantially reduced the minimum investment required for each of its mutual funds. According to Ms Uribe, this shows “the company is committed to increasing financial penetration in Colombia”, so that all types of customers can benefit from the professional management and diversification of varying investment portfolios.
Extensive range of products
Davivienda Corredores has six mutual funds of traditional, listed assets, which are designed to meet the needs, risk appetite and investment objectives of both its individual and corporate customers. The aim is to offer alternatives that support customers at all stages of their journey and to establish different types of investment objectives.
In the conservative profile, there is Fondo Interés and Multiescala: two options that invest in local, short-term fixed income to pursue an attractive return with very low risk.
In the moderate profile, they have the newly-launched Renta Fija Largo Plazo which invests in a longer-term fixed income to pursue higher valued opportunities, and Balanceado Activo, a fund that combines 30% equities and 70% of fixed income, mainly local but with the capacity to invest around 15% abroad to take advantage of higher value opportunities.
Finally, in the aggressive profile, they have Fondo Acción which performs active management in Colombian stocks, and Fondo Balanceado Global, which seeks to provide easy access in Colombian pesos to a portfolio abroad that combines 40% fixed income and 60% equities and which performs an active management of currency exposure.
“The Renta Fija Largo Plazo fund launched in February 2019 has recorded such a significant growth in its AUM that it has already become the largest fund of its peer group. In its first year, the fund achieved a net return for its investors of 8% in Colombian pesos, “a result that also ranks it first
in the profitability ranking of its peer group,” says
An eye on the future
According to Ms Uribe, Davivienda Corredores is working to strengthen its value offer in mutual funds by making them 100% digital: “To fulfill this goal, we have embarked on more than 20 initiatives to transform the processes as well as to achieve the required cultural shift inside and outside the organisation,” she says. The firm is also currently working to offer mutual funds that incorporate environmental, social, and governance (ESG) values into the criteria used to build investment portfolios. This is important, as a growing awareness of this area has made Colombian investors increasingly interested in investing in products that are aligned with their ethical, personal or corporate values.