10. Basic Elements in Investment Funds

Taking as reference Principal Institucional S.A. of C.V. Investment fund in debt instrument at Mexico, we have the following information:

1. Market Risk

Homogeneous Scale Fitch Scale Volatility

1 S1 Extremely low

2 S2 Low

3 S3 Low to Moderate

4 S4 Moderate

5 S5 Moderate to High

6 S6 High

7 S7 Very High

We understand market risk like the volatility associated with the value of an asset, in the face of changes in prevailing market conditions.

2. Credit risk

Management and Asset Quality

Homogeneous Scale Fitch Scale Credit quality

AAA AAAf Outstanding

AA AAf High

A Af Good

BBB BBBf Acceptable

BB BBf Low

B Bf Minimum

We understand credit risk like the payment capacity of the debt issuer (government and/or companies) to investors.

3. Net return: It is important to know what rate of return each investment fund gives us in different periods of time, in order to make comparisons.

Finally, it should be noted that it is important to establish a connection between market risk, credit risk, investment in the short, medium and long term, as well as net return, among other factors (given that in this article only the aforementioned factors are considered), to decide which investment fund is the best according to our particular needs, in which we can include our age. We believe that, referring to the investment, the older the age the lower the risk should be and the lower the age, possibly the higher the risk.