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.
T 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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