Chile investigates pension fund managers after losses

Regulators in Chile have opened an investigation into the country's pension fund administrators after the most conservative funds in the system posted heavy losses, according to Bloomberg Línea.

The Pensions Superintendency said the probe seeks to determine whether the firms breached their fiduciary duty in managing retirement savings, following a series of investment decisions that failed to deliver the expected returns.

Finance Minister Jorge Quiroz told reporters that authorities want to establish whether the losses reflect the normal dynamics of portfolio management or whether the administrators were negligent.

The losses stemmed from bets on lower U.S. interest rates, which backfired when Treasury bond yields rose. This hit Fund E, which is designed for more conservative investments and is down 10.4% this year, according to data published by Bloomberg Línea.

In response, the regulator has already imposed new limits on exposure to derivatives, and the Senate Labor Committee will hear from the superintendent and representatives of the AFPs to review the case.