Colombia Pension Funds Get Equity Boost
Colombian pension funds are set to implement a multi-fund structure that allows savers to calibrate investment by risk appetite. The move should boost AFPs’ investment in equity.
by Taina Rosa
When Colombian pension funds implement a new multi-fund system
slated to take off in September, savers will be able to choose
between funds that assume a range of risks. They can opt for
aggressive, equity-focused investment, or more conservative
models mostly buying fixed income.
Fund contributors will
make their selection according to age and risk appetite. Since
70% of Colombian workers are under the age of 40 and are widely
expected to choose a more aggressive profile, the new structure
is expected to create more demand for equity.
"The Colombian population
is young, which makes one think that affiliates of pension
funds would prefer their investments to be focused more on the
equities side," says senior equities analyst Estefanía
León at Bogota-based brokerage Correval.
The three largest pension funds in Colombia are Porvenir,
with $12.7 billion equivalent in assets under management (AUM)
Already have an account?
Subscribe now for unlimited access to all current and archive news, data and market analysis.
Take a free two-week trial now for the latest news, data and market analysis.