Chile watchdog reports decade-high pension savings returns
Assets under management in Chile’s private pension, or AFP, system hit a record of nearly US$219bn at the end of June following strong returns.
The sum is equivalent to 77% of GDP.
Three of the system’s five risk-based funds registered their best performances in a decade in H1, watchdog SP said in a statement.
Each of the country’s six AFPs manages five funds – A, B, C, D and E – which their members can choose from, with A being the highest risk and E the lowest.
Over January-June funds C, D and E saw real returns of 8.72%, 9.21% and 7.26% – the highest in 10 years.
S&P cited as a key driver the performance of AFP investments in foreign stocks. Investments in local and foreign fixed-income instruments also contributed.
At the end of June, the bulk (68.4%) of assets in top-performer fund D were in local fixed-income instruments, followed by foreign stocks (14.5%), foreign fixed-income instruments (12.4%) and local stocks (4.7%).
Funds A and B reported real returns of 7.39% and 7.51%, respectively. The two funds experienced mixed fortunes in January-June amid volatility largely linked to the US-China trade spat.
In the 12 months through June, real returns registered by A, B, C, D and E were 4.20%, 5.31%, 8.60%, 10.50% and 8.92%.
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