August 10, 2011 / 6:21 PM / 8 years ago

Most Chile pension fund returns off sharply in July

* Fund returns down on falls in foreign, local investments

* Value of pension funds grew 5.9 percent in July

SANTIAGO, Aug 10 (Reuters) - Returns on most Chilean pension funds fell in July on losses in investments abroad and locally amid global financial turbulence, the country’s pension regulator said on Wednesday.

Chile’s six pension fund administrators manage five types of fund with different levels of risk.

Returns on “A” and “B” funds, seen as the riskiest in the system, fell 2.23 percent and 1.85 percent, respectively, in July.

The “C” fund, considered to have an intermediate degree of risk, reported a drop of 1.48 percent.

Fund “D,” seen as conservative, fell 0.76 percent, while fund “E,” considered the least risky in the market, rose 0.37 percent on gains in Chilean bonds.

Chile’s main stock index, the blue-chip IPSA .IPSA fell nearly 8 percent in July, its biggest drop in nearly three years. The index has lost more than 9 percent so far in August, dragged down by volatility on global bourses amid fears of a world economic slowdown.

“The returns of the A,B,C and D funds is due primarily to losses on investments in local equities and foreign equities and fixed income tools,” the regulator said in a note.

The value of pension funds grew to $156.432 billion in July, up 5.9 percent from the same period last year. (Reporting by Maria Jose Latorre; writing by Alexis Krell; editing by Simon Gardner and Jeffrey Benkoe)

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