Ministry of Finance receives annual report from the Financial Committee of the Sovereign Wealth Funds

Tuesday, april 28, 2020

In a meeting held by videoconference on April 27, 2020, the Minister of Finance, Ignacio Briones, met with the president of the Financial Committee, José De Gregorio, to receive the Annual Report that summarizes the main activities carried out by the Committee during 2019. The text can be downloaded here.

The Minister of Finance thanked the work carried out by the Financial Committee, highlighting the progress in the implementation of the new investment policy of the Pension Reserve Fund, approved at the end of 2017. The Minister emphasized the investment in two new asset classes, High Yield Bonds (HY) and US Agency Mortgage-Backed Securities (MBS), which represented about 8% and 6% of the fund, respectively, when they were implemented at the beginning of last year. He also highlighted the gradual increase in the exposure of equities, which reached approximately 29% of the fund at the end of 2019.

During the meeting, the authorities assessed the Sovereign Wealth Funds’ importance in the country's macro-fiscal institutional framework, especially in the current situation. In this context, they exchanged views on the projected sizes of the Pension Reserve Fund, considering recent legislative adjustments, and of the Economic and Social Stabilization Fund. Likewise, they pointed out the importance that the new study of the investment policy of the latter should incorporate the new fiscal situation in the definition of the policy. This study has been assigned to an international consultant.

The delivery of the Annual Report fulfills the requirement established under Decree N° 621, issued by the Ministry of Finance in 2007, which stipulates that the Committee must prepare an annual report which will be delivered to the Finance Minister at most during the second fortnight of April. In accordance with the provisions of the aforementioned decree, a copy of said report was also dispatched to Finance Commissions of the Senate and the House of Representatives and to the Joint Budget Commission.

External and autonomous, the Financial Committee is made up of professional experts with extensive experience: José De Gregorio (president), Cristián Eyzaguirre (vice president), Ricardo Budinich, Jaime Casassus, Martín Costabal and Paulina Yazigi.

 

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