The AFPs (pension fund administrators) in Chile and Peru have an almost identical design, but delivered very different results over the past twelve months, according to BioBioChile. Chile's Fund E, the most conservative, lost 9.38% in real terms through September 2026. In Peru, the most conservative fund fell just 0.12% and the riskiest gained 25.99% in real terms.
"Real" means the figure already accounts for inflation. In other words, it measures how much purchasing power your savings gained or lost, rather than just how many pesos are in the account.
According to the Superintendency of Pensions (SP), Chile's five pension funds returned 9.21% (A), 5.96% (B), -0.35% (C), -4.74% (D) and -9.38% (E). In Peru, the Superintendency of Banking, Insurance and AFPs reported 25.99% for fund 3, 12.60% for fund 2, 2.83% for fund 1 and -0.12% for fund 0.
In Chile, Fund A is the riskiest and concentrates on stocks. Fund E invests in fixed income, such as bonds, and is often seen as a safe haven for savings. In Peru, the scale runs from 0, the most conservative, to 3, the riskiest.
Gonzalo Iberti, director of the Master's Program in Finance and Investment at Diego Portales University (UDP), described the two systems as "first cousins". He explained that the Peruvian system was designed using the Chilean model as its basis, so the underlying architecture is the same.
The differences lie in the details. In Peru, the private system operates alongside a public pay-as-you-go system, and workers choose between them. In Chile, the old system was closed to new contributors. Both countries experienced pension fund withdrawals: three in Chile and eight in Peru.
Matías Estay, head of research and financial risk at Penta Vida, added other differences. Peruvian law allows people to withdraw up to 95.5% of their fund upon reaching retirement age. In Chile, savings are used to finance a monthly pension, with exceptions such as withdrawals for terminal illness.
The two markets also share owners. ILC Group and Prudential Financial control Habitat in both countries, and Sura Group operates Capital in Chile and Integra in Peru. Chile has seven administrators and Peru has four.
For Estay, the gap reflects "different investment strategies and regulations, rather than the superiority of one model". He attributed Fund E's losses to financial hedges and derivatives (contracts whose value depends on another asset, such as an interest rate). Those positions suffered as global and local interest rates rose.
According to Estay, Peruvian funds have different limits on foreign investment. As a result, they were not exposed to that volatility and benefited more from the rise in their local market.
Iberti agreed that Peruvian AFPs hold a much larger proportion of their assets in the local stock market, which experienced an exceptional cycle driven by mining. Chile, by contrast, diversifies more abroad. It is like keeping eggs in different baskets: it provides protection in bad times, but means missing out on a particular boom at home.
The academic urged caution when making comparisons. Figures may use different scales, units and periods, and a nominal return is not the same as a real return.
For a Chilean contributor in Fund E, the consequence is concrete: over twelve months, they lost almost a tenth of their savings in real terms. The arrival of generational funds, which will broaden the range of options in Chile, will be the system's next test.
