Chile's Top Pension Funds Posted -2.0% Average Return In Sept
October 11 2011 - 10:59AM
Dow Jones News
The largest group of funds managed by Chile's private
pension-fund managers, or AFPs, averaged a real, non-annualized
return of -2.0% in September, government regulator SAFP said
Tuesday.
All pension funds, including the heavily weighted C-fund,
slumped in September as increasing concerns about the euro zone's
sovereign-debt troubles and anemic global growth dragged equities
markets in Chile and abroad sharply lower.
Overall, the AFP funds held $132.66 billion at the end of
September, down 1.3% on the year.
The largest fund, which is known in Chile as the Type C-fund and
includes both fixed-income and equity instruments, holds some 41%
of all AFP funds.
Of the C-fund's holdings, 30.3%, or $16.47 billion, was invested
abroad at the end of September.
Late last year, the central bank moved to gradually increase the
cap on the AFP funds' foreign investments to 80% from a 60%
limit.
On Dec. 1, the limit was raised to 65%, to 70% on March 1, to
75% on June 1, and to 80% on Sept. 1.
The move was likely intended to increase the outflow of dollars
from the local market in a bid to weaken the Chilean peso, which at
the time was trading near three-year highs versus the dollar. In
recent weeks, the peso has weakened to more than a one-year low as
international copper prices slumped on growing worries about a
European sovereign-debt contagion and continued signs of slowing
global growth.
The pension-fund managers also offer four other account types,
which invest in equity and fixed-income instruments to varying
degrees, with contributors close to retirement age investing in
less-risky funds heavy on fixed income.
Among individual funds, AFPs had a total $24.37 billion invested
in the highest-risk A Funds as of Sept. 30; $24.68 billion in B
Funds; $54.38 billion in mid-risk C Funds; $19.56 billion in D
Funds; and $9.68 billion in the lowest-risk E Funds.
At the end of September, AFP Provida SA (PVD, PROVIDA.SN)
managed the largest portfolio, with $38.80 billion under
management, down 3.8% on the year, the regulator said. Provida is
51.6% owned by Spanish bank Banco Bilbao Vizcaya Argentaria SA
(BBVA, BBVA.MC).
AFP Habitat (HABITAT.SN), Chile's second-biggest AFP with $33.58
billion under management, increased 0.1% on the year in terms of
holdings.
Number three AFP Capital managed $29.24 billion at the end of
September, down 2.4% on the year. Capital was created in 2008 after
Dutch banking group ING Groep NV (ING, INGA.AE) bought Banco
Santander SA's (STD, SAN.MC) AFP Bansander and merged it with its
AFP Santa Maria.
AFPs are key investors in Chilean equity and fixed-income
markets.
-By Anthony Esposito, Dow Jones Newswires; 56-2-715-8929;
anthony.esposito@dowjones.com
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