The law states that Afores must invest workers’ resources in instruments with greater or lesser risk and, therefore, with greater or lesser returns, depending on the age of the savers.
They do this through the SIEFORES (Investment Company Specialized in Retirement Funds). And this Friday, the modifications to the investment limits in various financial instruments were published in the Official Gazette of the Federation, in order to give greater returns to workers’ savings.
According to the National Commission of the Retirement Savings System (Consar), the new modifications are based on three factors:
- The change to the Generational Siefores model made five years ago.
- The reform of the pension system, implemented starting in 2020, which will imply a significant growth in the resources under administration of the Afores.
- The reform to the Securities Market Law of 2023 that seeks to promote the growth of the debt and capital market in Mexico.
Main modifications
Investment limits in Structured Instruments
Greater exposure to alternative instruments can bring benefits to the portfolios, especially in the Siefores of younger workers, therefore, limits on this asset class are increasedwhile encouraging greater investment in national projects such as energy and infrastructure. The Afores may invest up to 30% of the assets, subject to the conditions determined in the Single Financial Circular.
Investment limits in FIBRAS
In the current context of relocation, a boost to the demand for industrial and commercial spaces in Mexico is expected, which will imply a positive impact on FIBRAS. The modification will allow, especially the younger Siefores, to have greater exposure to this asset class, up to 12.5% of the assets.
Investment limits in foreign currency instruments
With the introduction of the Generational Siefores scheme, the limit for instruments denominated in currencies remained constant for all Siefores, so in this update of the Investment Regime these limits are harmonized with the trajectories of the rest of the assets without being affected. performance, but limiting the risks.
Limits of the Conditional Value at Risk Spread (DCVaR)
In order to take full advantage of the risk-return profile in line with the working life of workers and that the Siefores can increase their investments in variable income assets, especially for the Siefores of younger workers, the limits applicable to the DCVaR are increased.
The DCVar allows you to compare risks between different investment options for Afore resources.
Definition of Simplified Station
In line with the reform of the Securities Market Lawthe inclusion of this definition will allow expanding the diversification opportunities of the portfolios managed by the Siefores, while promoting the growth of the debt and capital market of the Mexican financial system. Simplified issuers are a scheme that seeks to provide access to stock financing to small and medium-sized companies.
