Mexico’s $120 Billion AFOREs Can Now Invest in Commodities

Pension funds, known as AFOREs (Administradoras de Fondos para el Retiro) in Mexico, are some of Mexico’s largest institutional investors. 1.68 trillion pesos are under management with Mexican pension funds which equates to US$ 120.6 billion. Starting June 20, 2012, AFOREs will be able to invest in the majority of commodity-linked securities. In addition, AFOREs will be able to invest in commodity futures, options, and swap contracts. Banco de México authorized investments for commodities from oil to milk.

Currently, AFOREs have most of their asset allocation towards Mexico’s debt markets. Since December 2011, some workers have been able to invest 5 to 10% in commodity-linked securities.

AFORE Banamex, Mexico’s largest pension fund, will gradually move as much as 2% of total assets into commodities.

List of AFOREs

  • Afirme Bajío
  • Azteca
  • Banamex
  • Bancomer
  • Coppel
  • Inbursa
  • SURA
  • Invercap
  • Metlife
  • PensionISSSTE
  • Principal
  • Profuturo GNP
  • XXI
  • Amafore

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