SANTIAGO (Dow Jones) -- The largest group of funds managed by
Chile's private pension-fund managers, or AFPs, averaged a real
return of -3.9% in 2011, government regulator SAFP said Friday.
Chile's pension funds had a mixed year as the three riskiest of
the five types of funds saw negative returns, but the two more
conservative funds posted small but positive returns.
Overall, the AFP funds held 70.38 trillion Chilean pesos ($137.7
billion) at the end of 2011, up 1.2% from the end of the previous
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.
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.
The riskiest A fund, which heavily invested in local and
overseas stocks, averaged a return of -11.3% in 2011, while the
most conservative E-fund, which is mostly invested in local
fixed-income, returned 4.3% in 2011.
AFPs held 63.6% of their holdings in domestic investments and
the other 36.4% in investments abroad.
Of the C fund's holdings, 31.6%, or CLP9.02 trillion, was
invested abroad at the end of the year.
In 2010, the central bank moved to gradually increase the cap on
the AFP funds' foreign investments to 80% from a 60% limit.
The move was intended to increase the outflow of dollars from
the local market in a bid to weaken the Chilean peso, which that
year was trading near three-year highs versus the dollar.
Since then, the peso has lost ground in line with many
emerging-market currencies around the world amid jitters over
Europe's sovereign-debt crisis.
Among individual funds, AFPs had a total CLP12.87 trillion
invested in the highest-risk A funds at the end of 2011; CLP13.0
trillion in B funds; CLP28.5 trillion in mid-risk C funds; CLP10.45
trillion in D funds; and CLP5.57 trillion in the lowest-risk E
funds.
At the end of 2011, AFP Provida SA (PVD, PROVIDA.SN) managed the
largest portfolio, with CLP20.38 trillion under management, down
1.4% 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
CLP17.89 trillion under management, grew 2.7% on the year in terms
of holdings.
The third-largest, AFP Capital, managed CLP15.49 trillion at the
end of the year, down 0.1% on the year.
AFPs are key investors in Chilean equity and fixed-income
markets.
-By Carolina Pica, Dow Jones Newswires; 56-2-715-8919;
carolina.pica@dowjones.com