Chile’s five private pension fund managers’ (AFPs) heightened exposure to stocks in January made them exceed their variable investment caps in the A, B and C multifunds, which limits the selective stock index IPSA’s upside potential, local brokerage BCI Corredores de Bolsa said in a research note.

AFPs continued to increase their exposure to local stocks and overseas investments in January, growing to represent 14.5% and 45.4% of their respective assets under management compared to 13.9% and 43.8% at end-December.Each AFP offers a family of five multifunds with different risk profiles. Fund A has the highest ceiling of variable income investments at 80% of total assets under management, followed by fund B at 60% and fund C at 40%.

“While we don’t expect strong adjustments, there will be less buying pressure, so [the IPSA] will tend to show less volatility than foreign markets,” BCI Corredores de Bolsa said.

According to data from pension regulator SP, AFPs’ total assets under management decreased 4.1% to US$113bn as of January 31 compared to end-December, mainly due to a weaker peso and falling stock markets abroad.

The AFPs sold US$18mn worth of local stocks in January as they carried out marginal adjustments to their portfolios in a month were the IPSA rose 6.4%, brokerage Banchile said in a report.

According to Banchile, funds A, B and E bought local stocks to the tune of US$3.5mn, US$6.4mn and US$2.4mn respectively in January, while fund C disinvested US$21.2mn and fund D sold US$9mn worth of stocks.