WORKING PAPER N° Mots clés: Codes JEL: Comments Welcome Why Should the Portfolios of Mandatory Private Pension Funds be Captive? ( the Foreign Investment Question).


Velasco. All the opinions expressed are strictly my own. Anna Afshar has provided admirable research assistance. Thierry Tressel has kindly made some of his financial data available. Stephanie Ford helped with the typing. Any remaining errors are my own. Should the portfolios of mandatory, private pension funds in developing countries be invested exclusively in the home country? Or should their managers be free to make prudent investments anywhere in the world? Traditional portfolio analysis gives a clear answer from the point of view of the beneficiaries of the funds: Lifting geographic restraints expands the riskreward frontier, and unequivocally enhances their [...]