Rear-view-mirror driving in defined contribution systems: the strange formula of the Chilean pension funds

Jose Olivares

Applied Economics, 2008, vol. 40, issue 15, 2009-2019

Abstract: The pioneering regulation on Chilean pension funds under Defined Contribution program requires private managing institutions to exclusively manage individual accounts and meet a minimum return to their clients. The purpose of this study is to empirically investigate the investment behaviour of pension funds and to contribute to the Social Security debate. The findings reveal the benchmark significantly explains funds' performance. Pension funds tend to replicate their asset allocations to exhibit similarities in returns. We believe the obligation on fund managers to attain a minimum guaranteed return, based on relative performance evaluation, encourages them not to deviate from the industry's performance; indeed, the benchmark explains most of the group performance. To hold similar allocations, managers may monitor each others through their investment style.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/00036840600936345 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:40:y:2008:i:15:p:2009-2019

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036840600936345

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().