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Source: www.consar.gob.mx
In order to expand the investment possibilities of the portfolio of the Pension Fund Investment Companies (SIEFOREs) and enable greater diversification of the long-term savings of Mexicans, the Governing Board of the National Commission of the Retirement Savings System (CONSAR), with the approval of the Advisory and Oversight Committee, have authorized adjustments to the investment regime of the SIEFOREs, which were published this Tuesday in the Federation’s Official Gazette.
The main adjustments consist in:
1. The financial tools for coverage in the retirement savings system are extended. In order to provide greater defensive tools to the Afores that provide greater security for workers’ resources, and given the need to accelerate the portfolio diversification process, new financial alternatives for coverage are incorporated into the investment regime. Swaptions-type derived operations will be permitted, including options on swaps, options on futures and options on forwards, as well as futures on swaps, which will provide investment value during periods of volatility, i.e. variations in the exchange rate, interest rates, stock markets, among others. Once the Central Bank’s regulations governing this matter have been published and the fund managers have met the prudential standards required of them, these tools will contribute to improving risk management and will make it easier to maintain long-term investments.
2. Debt instruments whose source of payment is a real asset. These investments will be increasingly important in Mexico, since they are fast and efficient vehicles for channeling investment to productive projects, while allowing pension resources to participate in the financing of long-term projects. In addition to the above, due to the accelerated growth of the resources in the Retirement Savings System and the need to promote greater diversification of the SIEFORE portfolio, the definition of structured instruments has been expanded to include debt instruments whose source of payment is real assets. These instruments are used for financing real specific projects (as opposed to other debt securities used for general purposes such as expenses, salaries, etc.). These instruments contribute to the diversification of the SIEFORE portfolios since their payments are more linked to the real economy and they contribute to the financing of enterprises and job creation.
3. Real Estate Investment Funds (FIBRAS). SIEFORES 2 to 4 were authorized to invest in FIBRAS in 2008 for financing infrastructure and real estate. The equivalent in international markets is known as REITs (Real Estate Investment Trusts). From the first issuing of FIBRAS ONE on March 18, the FIBRAS have grown significantly, reaching a total issued amount of 90,535 million pesos at the end of September 2013. The AFOREs have actively participated in this market (16.7% of total placements). The Governing Board therefore allowed Basic SIEFORE 1 to invest up to 5% of managed assets in FIBRAS. For the first time, the SIEFOREs were also allowed to invest in REIT’s listings in recognized markets, within the investment limits in force for this asset class. The expansion of the investment regime to include new asset classes seeks to promote greater diversification of portfolios and enable financing real productive projects.
All these measures will provide the Afores with:
