DR pension AUM sees strong returns-driven growth

The Dominican Republic's association of pension fund managers (ADAFP) said total assets under management increased by RD$64.1bn pesos (US$1.31bn) in 2017.

Investment returns made up RD$38.4bn pesos - or roughly 60% - of the increase, local daily Hoy reported ADAFP's executive president Kirsis Jáquez as saying.

Jáquez said the average nominal return on AFP investments came out to 10.8% last year. Adjusted for inflation, the average return was 6.3%.

"The results demonstrate that the larger part of workers' pension funds growth is due to profitability obtained by the AFPs for their affiliates," said Jáquez.

The sector representative added, however, that the nation's AFPs must work to diversify the investment schemes they manage and are seeking to tap deeper into the capital market.

Jáquez said more diverse investment opportunities would allow for greater participation in debt issuances from high-impact sectors, such as energy and infrastructure, as well as in foreign investment funds - all of which would contribute to higher long-term profitability for pension funds.

A number of pension fund managers have gained additional leeway in investments from regulatory bodies across the region, including via initiatives underway in Mexico, Peru and Chile.