Mexico’s pension fund managers soon will be able to
invest overseas. Debaters at a LatinFinance conference in November
looked to the future of offshore investing.
here are not many free lunches up for
grabs anywhere, least of all in financial markets. However, as
Rodrigo Alamos, a partner at Capital Advisors in Chile, points out,
"The only free lunch that exists is diversification." Put simply,
international diversification delivers lower risk and greater
yields for fund managers than a strictly domestic investment
portfolio can achieve. Mexicos Afores, or privately managed
pension funds, should soon be allowed to invest part of their
$35.37 billion in assets under management in foreign markets. It
may seem strange for a developing country like Mexico to export
capital, yet doing so makes perfect sense for fund managers with a
fiduciary duty to their future retirees by seeking out the best
returns for the lowest risk. Says Carlos Kretschmer, investment
director, at Afore Allianz Dresdner, "It is important to diversify
globally because you never know what will happen in this country.
We are investing for the long term, for 40-45 years."
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