/ New Market Indices for Target Date Pension Funds
September 22, 2026On September 10, 2026, the Chilean Pension Regulator (“SP”) issued Exempt Resolution No. 1244 (Resolution), establishing the market indices that will be used to determine the composition of the reference portfolios for the target date pension funds (“TDFs”) that will replace the current ABCDE pension funds as of April 1, 2027.
Felipe Cousiño, Partner
Francisca Donoso, Senior Associate
Laura Tressler, Associate
The SP identified a set of market indices covering domestic and international equity, government bonds, corporate bonds, investment-grade fixed income, emerging market debt, high-yield debt, private equity, alternative investments and money market instruments. These indices will form the building blocks of the reference portfolios against which TDFs will be assessed.
The selected index providers include MSCI, Bloomberg, LVA Índices and RiskAmerica, although the Resolution clarifies that such designations remain preliminary pending the execution of the corresponding agreements with such providers. All names remain subject to confirmation.
Reference Portfolio Market Indices
| Code | Asset Class | Market Segment | Market Index |
| 1 | Domestic Equities | Domestic Equity | INFOCES Index (Santiago Stock Exchange) |
| 2 | Domestic Government Bonds | Chile Government Bonds | 50/50 blend of LVA and RiskAmerica UF Chile Government Bond Indices across duration buckets |
| 3 | Domestic Corporate Bonds | Corporate Fixed Income | 50/50 blend of LVA and RiskAmerica UF Corporate Bond Indices across duration buckets |
| 4 | Developed Markets Equities | Developed Markets | MSCI World Index and MSCI World Investable Market Index |
| 5 | Foreign Emerging Markets Equities | Emerging Markets ex-Latin America | MSCI Emerging Markets ex Latam Index |
| 5.1 | Latin America ex Chile | MSCI Emerging Markets Latam ex Chile Index | |
| 6 | Foreign Investment Grade Fixed Income | Developed Markets | Bloomberg Global Aggregate Developed Countries Index |
| 7 | Foreign Emerging Markets Fixed Income | Emerging Markets | Bloomberg EM USD Aggregate Total Return Index Value |
| 7.1 | Emerging Markets (local currency) | Bloomberg EM Local Currency Liquid Government Bond Index and Bloomberg EM Local Currency Broad Bond Index | |
| 8 | Foreign High Yield Fixed Income | Global Market | Bloomberg Global High Yield Index |
| 9 | Private Equity | Private Markets | Index provided by the SP |
| 10 | Other Alternative Investments | Alternative Assets | Index provided by the SP |
| 11 | Domestic Financial Intermediation Instruments | Domestic Financial Intermediation | SP Index based on RiskAmerica and LVA Índices data |
Currency Hedging Framework
The Resolution establishes that the certain indices will be incorporated through a combination of their hedged and unhedged versions, with the objective of achieving specific foreign exchange hedging levels..
In addition, a transitional currency hedging schedule will apply between April 1, 2027 and March 31, 2028.
Chile Fixed Income Duration References
For domestic government and corporate bond allocations, the SP also established reference duration metrics by maturity bucket. For government bonds, average durations range from 3.0 years in the 2-5 year bucket to 16.0 years for maturities exceeding 12 years. For corporate bonds, average durations range from 3.3 years to 13.9 years across the same maturity spectrum. AFPs will be required to construct portfolio combinations that remain within the duration parameters established by the Investment Regime.
Alternative Assets Index Methodology
The Resolution also sets out the methodology that will be used for measuring the performance of alternative investments. The SP adopted the Modified Dietz Method.
The methodology will apply to both domestic and foreign alternative investment vehicles held directly or indirectly by the pension funds.
The resolution is available at the following link.
For any questions or further information, please contact the Capital Markets Practice Group.
