In August, the profitability of the AFP funds continued to be negative; however, a slight slowdown was registered and reached a drop of -5.45%, after a maximum of -9.69% in July, according to the latest report from the Superintendence of Banking, Insurance and AFP (SBS).
In line with the trend of recent months, the lowest performance was recorded in fund 1, whose nominal annual return fell -5.45% and thus completed 9 consecutive months in negative (December-August). The 2-year return also recorded losses with -1.87%, while the 3-year return was in positive territory with an advance of 0.24% and a better performance in Prima AFP (0.81%).
Meanwhile, fund 2, which concentrates the savings of 91% of affiliates, had a nominal annual return of -4.94% and thus accumulates four months of losses, but to a lesser extent than -7.79% in July .
For its part, fund 3 closed August at -0.22% annual. While fund 0 remained positive with 2.75%.
fall would stop
ESAN Graduate School of Business professor Luis Mendiola said AFP funds are likely to continue to recover in the coming months. This as a result of the change in the monetary policies of the US Federal Reserve (Fed) and the Central Reserve Bank of Peru.
“Eventually, the Fed will stop raising interest rates and the BCRP will align, then there will be some competitiveness and the local market will recover,” he said.
The specialist also estimated that profitability would be positive in the first months of 2023. However, this will depend on international factors such as “the greater clarity of the effects of the war in Ukraine and the financial situation of the US.
Recovery of funds
According to Mendiola, affiliates would take up to 6 months, after the return to positive, to recover the losses recorded in their funds this year. “The rebound is not so instant, you have to return to the same level and from there return to positive,” he explained.