Chile Local Markets: New generational funds unveiled: Ultimate impact on FX and rates will depend on combined AFPs‘ allocation decisions

Research evidence excerpt

Chile Local Markets: New generational funds unveiled: Ultimate impact on FX and rates will depend on combined AFPs‘ allocation decisions

J P M O R G A N Global Markets Strategy

08 July 2026

Chile Local Markets: New

generational funds unveiled

Ultimate impact on FX and rates will depend on

combined AFPs’ allocation decisions

Emerging Markets Strategy

Gisela Brant AC

(1-212) 834-3947

gisela.brant@jpmchase.com

Tania Escobedo Jacob

• As part of last year’s pension reform rollout, Superintendencia has issued new (1-212)tania.escobedojacob@jpmorgan.com622-4128

investment guidelines, replacing multifunds A–E with ten age-based

Santiago J Olalquiaga Calcano generational funds.

(1-212) 622 2484

• Combining age-based capitalization account data with the new limits, we santiago.olalquiagacalcano@jpmorgan.com

estimate the resulting asset allocation ranges. J.P. Morgan Securities LLC

• Net flows into or out of domestic assets, and the respective impact on FX and

rates, will ultimately hinge on AFPs’ combined choices. Our estimated flow

ranges are USD -7 to +7.7bn for government bonds and USD - 13.6 to +22.9bn

for total domestic assets.

• This analysis ignores the impact of higher contributions, the bulk of which kick

in two years from now and are analyzed in our initial pension reform note.

Those should be generally positive for local assets.

• We are OW CLP and UW bonds, and hold 2s5s Camara flatteners (last: 31bp;

entry: 23bp; target: -25bp; review: 55bp; link).

Introduction

Chile’s pension fund system has been transitioning to a new regime since the

reform was passed last year. The reform introduced several changes, most

notably higher employer contributions, which are now being phased in, and the

replacement of the A-E multifunds framework with a generational-fund structure.