BlackRock has partnered with a major Brazilian independent life insurer and pension provider to launch the local industry’s first retirement product offering exposure to the international market.
The Icatu Seg Global Equity Income 10 FIM Previdenciario will invest in global equities up to the limit allowed by Brazilian regulation, said Felipe Bottino from Icatu Seguros.
In 2015, Brazil allowed insurers offering pension products to invest abroad up to 10% of the assets in each of their funds, enabling the launch of the new product.
BlackRock will run the 10% of the vehicle that will invest in quality global stocks providing stable dividends and sustained growth, Bottino said. Icatu will manage the other 90% and invest in inflation-linked securities to protect savers’ purchasing power in the long-run.
‘The fund opens up an important diversification option in investors’ portfolios at a time when interest rates are at low levels. Although the percentage applied is still small, our results in simulations indicate that the share alone makes a difference on long-term results,’ Bottino said.
BlackRock and Icatu expect the fund to gather 100 million reals ($31.33 million) in a year. The minimum investment is 500 reals and management fees will come in at 1.10%.
Icatu Seguros is one of Brazil’s independent leading life and pension insurers, with assets of more than $15 billion reals ($4.7 billion), according to its website. It offers more than 100 investment funds and boasts 130,000 corporate clients.