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FIAP > Boletín – Recientes > Pensions Note No.25 “Investment Portfolios of the Latin American Pension Funds” – May 2018

Pensions Note No.25 “Investment Portfolios of the Latin American Pension Funds” – May 2018

15 June, 2018
  • The investment portfolios of the Latin American Pension Funds (FP) have significant differences between them, which could be explained by the following: age of the individually funded pension systems, regulation of investments, development of local capital markets and the existence of Multifunds.
  • Colombia, Chile and Peru, the first 3 countries that implemented individually funded systems, have more diversified investments per instrument categories (between 40% and 60% in Fixed Income (FI) and Equity (E)), while the Dominican Republic, Uruguay, El Salvador and Costa Rica, countries with lower levels of maturity in their individually funded systems, have more than 85% of their portfolios invested in FI instruments.
  • Investment in government instruments fluctuates between a minimum of 19% of the portfolio in Chile and a maximum of 80.2% in El Salvador.
  • Investment in domestic companies, in both FI and E, fluctuates between 1.3% in Costa Rica and 31.6% in Mexico. Mexico leads FI investments in domestic companies with 25.7%, and Peru, Colombia and Chile lead the region with investments exceeding 10% of the total of their portfolios in E, while there is no investment in domestic stocks in El Salvador, Costa Rica and the Dominican Republic.
  • Investment in the domestic financial sector ranges from a minimum of 1.9% in Mexico to a maximum of 21.3% in Chile.
  • Peru leads foreign investment in both fixed income and equity, with 43.3% of the portfolio, followed by Chile (42.9%) and Colombia (35.7%). The Dominican Republic is at the other end of the scale, with no foreign investment.  Peru leads in E with 40.9% and Chile in FI with 13.6%.

Check this note in detail here.

 

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