LatinFinance - May/June 2014 - 45
INSTITUTIONAL
WEALTH
PERU
With a rapidly growing pension pool - and a laggard stock market -
Peru has started to grant funds more freedom over where and how they invest.
By Jason Mitchell
Outward bound
© iStockphoto
P
eru's pension fund industry is
growing rapidly - so rapidly, in fact, that
the local capital markets are finding it hard
to keep up. allowing the funds to increase
their allocations to different asset classes
and new geographies beyond Peru is a
natural response and in Peru, the regulators
have not been opposed to making those
changes.
two years ago, afPs were only allowed
to invest up to 20% of their allocation
overseas. But by July this year the limit will
stand at 40%. the limit can be raised to 50%
without appealing to congress for a change
in the law.
the backdrop to this is a stock market
that dropped by 30% last year, making it
one of the worst performers in the world.
as a result - while Peruvians are saving
more for their retirement - some funds
have begun to show negative returns
(returns have been flat during the past five
years).
in an attempt to reverse that trend,
regulators are giving local asset managers
SPREADING THEIR WINGS: Peru's
pensions funds are being given new
freedoms over where they invest
much more freedom over their asset
allocations, including increasing limits
on foreign investment. "the increase
in the limits is incredibly important for
the Peruvian pension system," says José
More abroad
Top ten pension funds in Peru
Investment allocations (%)
Annual returns (%)
Assets
($m)
Treasury
bills
Bank
deposits
Bank debt
(local)
Corporate
debt
(local)
Equity (local)
Int'l investments
(mutual funds)
2013
7-year
average
10.6
13.7
13.6
2.9
3.1
28.7
30.4
-1.70
3.56
Type 2
7.8
15.3
9.4
1.8
6.1
19.1
24.3
-5.14
3.71
Type 2
7.0
13.1
19.3
2.3
4.5
23.9
25.9
-1.94
3.92
Integra
Type 3
2.8
4.3
6.7
0.4
0.9
42.7
44.0
-1.29
4.13
Prima
Type 3
2.7
4.4
3.7
0.6
2.5
33.9
39.3
-5.48
3.53
Integra
Type 1
1.9
15.0
25.6
7.6
8.2
9.2
12.0
-2.78
2.41
Profuturo
Type 3
1.7
3.3
10.9
1.2
1.0
41.6
41.4
0.24
4.34
Prima
Type 1
1.4
14.7
21.4
8.6
18.5
4.5
7.2
-2.67
2.93
Profuturo
Type 1
1.2
11.0
30.4
6.7
9.8
6.7
9.2
-2.55
2.24
Habitat
Type 2
0.05
14.3
17.1
10.5
6.7
34.3
34.3
-
-
Manager
Fund
Integra
Type 2
Prima
Profuturo
Source: Superintendencia de Banca, Seguros y AFP, allocations to April 2014
May/June 2014 - l atinfina nce.com 45
http://www.latinfinance.com
LatinFinance - May/June 2014
Table of Contents for the Digital Edition of LatinFinance - May/June 2014
Contents
LatinFinance - May/June 2014 - Cover1
LatinFinance - May/June 2014 - Cover2
LatinFinance - May/June 2014 - Contents
LatinFinance - May/June 2014 - 2
LatinFinance - May/June 2014 - 3
LatinFinance - May/June 2014 - 4
LatinFinance - May/June 2014 - 5
LatinFinance - May/June 2014 - 6
LatinFinance - May/June 2014 - 7
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LatinFinance - May/June 2014 - Cover3
LatinFinance - May/June 2014 - Cover4
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