As we wrap up our discussion on the S&P/BMV IPC CompMx Trailing Income Equities ESG Tilted Index, it is important to explore the context surrounding its recent performance and emphasize the cyclical dynamics of sector movements.

In our previous blog, we examined how the index had underperformed relative to the broader S&P/BMV IPC as of Aug. 29, 2025, primarily due to underweighting the strong-performing Materials sector, which tends to include more companies with relatively lower dividend payouts. As of Oct. 31, 2025, the S&P/BMV IPC CompMx Trailing Income Equities ESG Tilted Index underperformed the S&P/BMV IPC by 7.75% year-to-date.

However, this underperformance should be analyzed in a broader context. A look at historical trends offers greater insight. Exhibit 1 summarizes the annual performance of the S&P/BMV IPC CompMx Trailing Income Equities ESG Tilted Index and the excess performance compared to the S&P/BMV IPC. Since its launch on Aug. 2, 2021, the index managed to outperform the S&P/BMV IPC in three out of five calendar years, exceeding the broader market by 0.86%, 0.46% and 4.76% in 2021 (since launch), 2022 and 2024, respectively.

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Exhibit 2 illustrates the calendar year performance of Materials, Industrials and the S&P/BMV IPC, as well as the excess performance of the S&P/BMV IPC CompMx Trailing Income Equities ESG Tilted Index versus the S&P/BMV IPC. We can see that historically, during periods when the Materials sector underperformed the S&P/BMV IPC, the S&P/BMV IPC CompMx Trailing Income Equities ESG Tilted Index outperformed the broader market.

The sole exception was in 2024, when the Materials sector outperformed the S&P/BMV IPC by 7.09%, yet the S&P/BMV IPC CompMx Trailing Income Equities ESG Tilted Index still surpassed the broader benchmark by 4.76%, marking the highest performance since its launch.

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This finding can be attributed to the interactions between sectors. Exhibit 2 also highlights the performance of the Industrials sector, which is characterized by higher dividend-paying companies and thus is overweight in the index. Historically, when this sector outperformed the S&P/BMV IPC, the S&P/BMV IPC CompMx Trailing Income Equities ESG Tilted Index benefited similarly, leading to stronger performance compared to the broader market. For instance, in 2024, the Industrials sector outperformed the S&P/BMV IPC by 14.68%, which helped mitigate the negative impact of the Materials sector’s strong rise and contributed to an excess performance of 4.76% for the S&P/BMV IPC CompMx Trailing Income Equities ESG Tilted Index.

Looking ahead, it is vital to acknowledge the inherent cyclical nature of sector performance. These findings suggest that the S&P/BMV IPC CompMx Trailing Income Equities ESG Tilted Index might not be merely reactive to prevailing trends, and the index has historically helped mitigate sector-specific volatility. By understanding historical performance patterns, there may be a clearer context for the future.

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