Chilean pension savers live badly 2022

The volatility marked the results of the multi-funds of the Pension Fund Administrators (AFP) during this year, to the point that the pension portfolios could close 2022 with their second worst annual accumulated performance since their creation in 2002 for funds A, B and C, which register falls only surpassed by the decreases of 2008, in the framework of the subprime crisis.

According to an analysis by Ciedess, between January and December 25, the riskiest fund, type A, registered a fall of 20.49%; B shows a decline of 15.66%, while C drops 9.22%.

Meanwhile, the most conservative funds obtained gains of 0.35% for Type D and 7.38% for Type E. In this way, the most conservative fund in the system scored the third best historical performance, after the returns of 2009 and 2019.

However, in historical terms, the riskiest funds are the ones that have yielded the most, according to the consultancy.

Risky funds and volatility

According to the Ciedess analysis, the annual result of the multi-funds with the greatest exposure to risk was mainly explained by the variations in the prices of variable income instruments and the dollar.

“Negative results are observed in the main international indices, being partially offset by the rise in the dollar, while at the local level there is a significant increase in the IPSA. Thus, the local results fail to compensate for the falls at the international level”, They commented to DF.

Inflation, pandemic and war, harm

As explained by the consultant, the pandemic, the Russia-Ukraine conflict, inflation and fears of a global recession affected the markets and caused historic increases in interest rates in different countries, especially in the United States and Europe.

While China has been affected by the strong restrictions in the context of the pandemic, the crisis in its real estate sector and falls in its economic growth projections. All situations that impacted the investments of pension savings abroad managed by the AFP.

On the other hand, the profitability of the more conservative funds D and E, was mainly explained by the good results of the investments in local debt securities, as well as the performance of foreign fixed income instruments.