Shares and Debt
Equity investments follow an upward trend
This is a mantra continuously repeated by third-party fund managers: in the long term, any type of investment will hardly exceed the results obtained in the stock market. This notion has recently began to make sense to Brazilians investing in private pension funds, whose portfolios were mostly composed of government fixed income securities.
With the drop in the basic interest rate, currently at 11.25% p.a., and a record income attained by Brazilian companies, private pension investors increasingly seek equity portfolios as a way to diversify their private pension-driven assets.
For private pension companies, another key factor in the growth of equity funds and investors’ eagerness for higher risks is the change in the limit set by the federal government for the pension fund system’s securities portfolios.
"We expect the government to allow the same flexibility to private pension funds as provided to investment funds – which may invest up to 100% of their portfolio in equity. I believe that no major restrictions should be imposed to private pension funds, which does not mean that small investors should be neglected", defends Sul America’s life and private pension vice president, Renato Russo.
"Today, our operation must be driven by diversification and creativity. Under this strategy, we launched a multiportfolio fund, which invests in the fixed income and equity markets. The market already offers products targeted at matching the same yields reached by specific market segments, and eventually promote changes in the prices of common and preferred shares, in a more active management approach", says SulAmérica’s vice president.
Source: Valor Econômico/SP
Last updated on 11/29/2007