U.S. fund managers have hoped for greater penetration into Latin America, but progress in developing key markets has been slow, according to Cerulli.

That said, opportunities exist, and may be opening up. Mandatory worker contributions into private pension systems in Chile, Mexico, Columbia and Peru continue to support growth of retirement assets in those countries, and Cerulli notes that pension regulators are showing a greater intent to open their borders to foreign investments.

Pension funds are the biggest buyers of U.S.-based investment instruments. Even a small shift in a fund’s allocation can result in significant opportunities for U.S. fund managers.

“An increase of 1 percent in allocation translates to an additional $20 billion of inflows to global managers,” noted Nina Czarnowski, senior analyst at Cerulli.

Brazil, which accounts for 82 percent of all of Latin America’s mutual fund assets, is an example of the frustration U.S. fund managers have had accessing Latin markets – and also of the enormous possibility.

Brazil’s “open” pension market, which allows any citizen to participate, is off limits to global funds.

But its “closed” pensions, which are limited to certain participants relative to their employers, are showing signs of opening up to foreign-based funds that invest in companies outside of Brazil.

“We are more optimistic about foreign managers’ opportunity in the closed pension market, as the benefit of international diversification is a concept that investment committees making allocation decisions are just beginning to take into account,” wrote Cerulli’s analysts.

Brazil’s homegrown mutual funds last year suffered their worst year of performance since the financial crisis, after enjoying double-digit growth the previous five years.

On the other side of the spectrum is Chile, a country that is a focus of international managers because of its willingness to invest outside of its borders. As of last December, 42.4 percent of its pension assets were invested outside of Chile.

Chile has also implemented a law that requires all self-employed Chileans to contribute to a government-run pension by 2015, which is expected to attract another $1.2 billion in foreign assets to that country’s retirement funds.

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