2014 ended with about US$52.5 billion invested in international funds (excluding ETFs) by the Chilean AFPs. The year was marked by the return of funds registered in Ireland to pension funds’ investment portfolios, since Chile’s Risk Classification Committee Risk (CCR), decided in September 2011 to remove all mutual funds domiciled in Ireland from its list of approved funds, due to Ireland’s perceived risk at that time in the context of the euro crisis.
This situation was reverted during 2014, normalizing steadily as the CCR gradually re-approved funds domiciled in Ireland. In total, at the end of December there were US$2.2 billion invested by Chilean pension funds in funds registered in Ireland. We continue to see new additions to this list monthly. In December, one of the three funds which premiered among Chilean AFPs was domiciled in Ireland; this was the Muzinich Short Duration High Yield Fund, which becomes part of the list of international funds in the hands of Chilean AFPs with US$40 million in assets. Nicolás Lasarte, head for Latin America at Capital Strategies, a company which is the exclusive distributor of Muzinich funds in Latin America, expressed his “great satisfaction” to Funds Society with this change which provides the opportunity to increase the availability of niche products for Chilean pension funds. “Although since 2011 we have been increasing Muzinich assets very steadily in the Chilean market, we could not be completely satisfied without access to pension funds and other institutions in the scope of influence of the CCR” added Lasarte. This is the first Muzinich fund which has obtained assets from Chilean pension fund management companies.
During the month of December, there have been only two other international funds, excluding ETFs, that have become part of this select group of funds. These are the Luxembourg domiciled Aberdeen Global Japanese Equity Fund, which has obtained assets of US$30 million from pension funds, and the Henderson UK Equity Income and Growth Fund, a fund domiciled in the UK which has obtained inflows of US$3.5 million.
For the time being, Luxembourg continues to be the quintessential home of international funds in which Chilean AFPs invest, with US$40.6 billion in assets at the end of December. Following is a list of the 10 international funds with most assets invested by the AFPs: