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Mexican Funds could consider investing in gold

It would seem that Mexican pension funds are interested in gold and in particular after the lifting of years of strict investment regulations according to the World Gold Council.

Legislation from 2012 allowed Mexican pension funds to invest in gold and other commodities in 2013 and more over in foreign assets. Not such a long time ago, we also read about some pension funds in Japan (which actually hold the world’s second largest pool of retirement assets) which have also decided to invest in gold.

Mexican pension funds account for 22% of Mexican savings and could double up in assets by 2018 according to the Wall Street Journal . Although they will have to determine how much they can invest in commodities and foreign assets, they won’t be able to invest more than 10% of their assets in commodities.

One has to know that pension fund interest in gold rarely impacts the gold price  since it plays a very small role in the global market estimated at $236. According to Bloomberg, it was estimated  in 2012 that only $9 billions in Mexican pension assets will be eligible for commodities investment overall while US hedge funds sold gold heavily in 2013 .

It will be interesting to know how Mexican pension funds perform with gold in the future. There again, are we talking about ETF or real physical gold … ?

To be continued …

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Thoughts
"For a mountaineer, the important things are the effort, the posture and the muscles. The rope that holds him serves no purpose when everything works but it gives him a sense of security. In the same way, all gold does is ensure confidence; it's a safe haven."