Consar Lifts the Lid
The government is gradually relaxing its strict controls on Mexico's Afores. This promises to unleash a radical shake up in a fast-growing industry.
Pensions regulator Consar announced in May that Mexico's
private pension funds, known as Afores, will be allowed to set
up "families of funds" offering contributors funds with a
choice of two risk profiles - conservative or aggressive.
This is a radical step in an industry that can only buy
government bonds and highly rated investment-grade corporate
paper. Aggressive funds will be allowed to invest in foreign
and Mexican equities and dabble in derivatives, an even more
radical advance. Investors aged 56 or above will be limited to
the conservative portfolio, which will hold only debt. But even
here Consar has relaxed its grip by allowing these funds to
hold both Mexican and foreign debt.
Paying into an Afore is compulsory for all formally employed
Mexicans, who can choose among 12 registered fund managers.
Funds under management are growing at a remarkable rate. The
Afores' aggregate portfolio grew 26% in...
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