CHILE – Chile’s $4bn Pension Reserve Fund has received the okay to make maiden investments in global equities and global corporate bonds, as well as in four new currencies, the Ministry of Finance said.
The fund can currently invest in the US dollar, euro and yen. But under the new guidelines, the fund can gain exposure to the Australian dollar, UK sterling, Swiss franc and the Canadian dollar.
Minister of Finance Felipe Larraín said the changes are in line with the growing international trend to move away from a concentration in dollars and euros, and into the currencies of other, smaller countries that can still offer strong guarantees.
The fund will now allocate 15% in global equity, 20% in global corporate bonds, 45% in global government debt, 15% in inflation-linked bonds and 5% in money market funds. The Ministry expects the pension fund to hit its target allocation by the second quarter of 2011.
In November, Chile's central bank raised the amount of assets pension funds can invest internationally to 80% from 60%. (Global Pensions; 5 November 2010)
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