In 2024, Chilean pension funds have been increasing their positions in international equity funds. According to figures compiled by HMC Capital, they have acquired approximately 3.172 billion dollars net in the first five months of 2024, with a significant bias towards the U.S. and Asia, particularly South Korea and Japan.
Among purchases and sales, the fund managers have allocated 1.824 billion dollars to strategies focused on the U.S. stock market. Within this category, the preferred asset class is Large Cap Blend strategies, where they have allocated 1.729 billion dollars net. This is followed by Large Cap Growth with a net investment of 630 million dollars, and sector strategies with 168 million dollars.
Another area of interest for Chilean pension funds this year is Asia. The net investment in the region (excluding Japan) reached 838 million dollars as of May, with South Korea being the main destination. Investment funds injected 1.004 billion dollars into South Korean equity funds, in addition to allocating 420 million dollars to Indian strategies and 196 million dollars to Taiwanese equity.
Japanese equity strategies received a net inflow of 603 million dollars, mainly in the Large Cap segment (650 million dollars), according to the HMC report.
On the opposite side, net divestments have been concentrated in Latin America. Among the sales of Latin American and Small Cap strategies, investment funds recorded a net divestment of 408 million dollars in the region between January and May. In Brazilian equities, in particular, 229 million dollars were sold during this period.
The only exception is Mexico, where penson funds have allocated about 248 million dollars in 2024.
Debt Portfolio
The flows recorded during the first five months of the year in debt portfolios have been more moderate. Considering all types of fixed-income vehicles, pension funds have sold 61 million dollars net.
The largest sales have been concentrated in investment-grade strategies, with a net divestment of 589 million dollars, driven by sales in U.S. and global bond vehicles.
Convertible debt funds also saw outflows of 52 million dollars, according to HMC figures.
In contrast, the largest net investments were focused on emerging market debt, with 421 million dollars—particularly in local currency strategies, where they allocated 239 million dollars; financial bonds, with 96 million dollars; and high yield, with 49 million dollars.
Additionally, pension funds slightly increased their positions in money market funds, investing 188 million dollars net between January and May.
Preferred Investment Managers
Regarding the fund managers that received the most flows from Chilean pension funds in the first five months of the year, passive management firms have shone, receiving a total of 2.482 billion dollars net.
The main recipients have been iShares and Vanguard, capturing 1.545 billion dollars and 1.215 billion dollars, respectively. This brought the total AUM in iShares strategies to 11.5 billion dollars and Vanguard’s to 8.447 billion dollars.
In the case of active managers, Man Group has taken the crown, managing equity, credit, multi-asset, and real asset funds. As of May, HMC data shows that the seven pension funds in the Chilean system have allocated 1.047 billion dollars to the firm’s funds.
Other active managers that have seen significant flows in 2024 include Goldman Sachs, with a net investment of 875 million dollars; Baillie Gifford, with 633 million dollars; and Janus Hnderson, with 438 million dollars.
