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Monday, May 6 de 2019

Finance Minister, Felipe Larraín, receives the Financial Committee’s 2018 Annual Report

The President of the Financial Committee, José De Gregorio, delivered the Financial Committee's Annual Report to the Minister of Finance, Felipe Larraín, summarizing the main activities carried out by this entity during the year 2018. The report can be downloaded here.

On this opportunity, the minister appreciated the progress in the implementation of the new investment policy for the Pension Reserve Fund (PRF), which was approved in November 2017. The minister highlighted the selection process carried out during 2018 that concluded with the hiring of external managers that are responsible for investing the portfolios of High Yield Bonds and US Agency Mortgage Backed Securities (MBS) since January this year.

Also, the Finance Minister exchanged views with the President of the Financial Committee about the role of the Economic and Social Stabilization Fund (ESSF) and the scope of the asset allocation study for this fund, which is expected to begin during the second half of the year. 

Finally, the minister instructed the President of the Financial Committee to analyze and recommend alternatives to incorporate environmental, social and governance (ESG) considerations in the investment process of the Chilean sovereign wealth funds. This decision is in line with the global trend of institutional investors and sovereign wealth funds to include ESG criteria in their investment decisions considering that evidence suggests that its inclusion does not destroy value. 

The delivery of this report fulfills the requirement established under Decree Nº 621, issued by the Ministry of Finance in 2007, which stipulates that the Committee must present an annual report on its work to the Finance Minister during the second half of April. According to this Decree, a copy of this report was also submitted to the Finance Commissions of the Senate and the House of Representatives and to the Joint Budget Commission.

The Financial Committee, which is external and autonomous, is composed of six professionals and experts with vast experience: Jose De Gregorio (Chairman), Cristian Eyzaguirre (Vice Chair), Ricardo Budinich, Jaime Casassus, Martín Costabal and Paulina Yazigi.

 

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