News
Date: 06/Nov/2009
Chilean sovereign funds obtain the highest possible score in a global ranking of transparency and good administration
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The Ministry of Finance said that the positive evaluation of Chilean funds recognizes the country’s institutional efforts to administer these resources following criteria of excellence and transparency. The Ministry also commented on recent recommendations made by the Finance Committee, which is an autonomous entity that advises on sovereign fund investments.
Chile obtained a perfect score in the global ranking of transparency and good administration of the world’s 45 major sovereign funds. The ranking was conducted by the Sovereign Wealth Fund Institute, a US-based think tank that specializes in studying this type of investment and savings instrument. Chile rose from sixth place in the second quarter of this year to a perfect score in the most recent study, and currently shares first place with sovereign funds from Norway, Singapore, New Zealand, Ireland, Alaska, the Arab Emirates, and Azerbaijan.
For the Ministry of Finance, Chile’s perfect score for management, transparency of investments, and disclosure of associated information recognizes the institutional efforts to manage the Economic and Social Stabilization Fund (ESSF) and the Pension Reserve Fund (PRF) using criteria of excellence and transparency. This is extremely relevant because these are resources that belong to all Chileans and they should be administered using the highest standards of security and prudence. For more information on the transparency index, see the Sovereign Wealth Fund Institute’s Website:
www.swfinstitute.orgOn another matter, the Ministry announced that even though it agrees with the technical criteria of the Finance Committee’s recommendation to gradually diversify the FRP’s portfolio by incorporating variable-income investments, it has decided not to make any innovations to the portfolio during the rest of President Michelle Bachelet’s administration. This is because the first results of these innovations would not be seen until the next administration takes office, so it seems reasonable to wait for the new authorities to decide about suggested changes in the portfolio’s strategic composition.
The Ministry of Finance recognizes and values the excellent work that has been done by the Finance Committee ever since it was created, as it has been guided by criteria of autonomy, high technical rigor, and a long-term vision. Its work has strengthened the credibility and institutional structure of sovereign funds. This is why the Ministry has asked the committee to prepare an exhaustive report that includes its vision and recommendations about sovereign fund investment policies so that Chile’s incoming administration can use it when defining future policies.
