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Credit Suisse Swiss Pension Fund Index
A comparison of Swiss pension funds
Published quarterly, the Credit Suisse Swiss Pension Fund Index gives a representative,
up-to-date picture of second pillar (employee benefit) investment activity. Thanks to the breadth of its analysis, the index accurately reflects the behavior of pension funds that have a global custody arrangement with Credit Suisse.
The Credit Suisse Pension Fund Index now stands at an all-time high despite the SNB decision
Performance of Swiss Pension Funds on the Basis of Credit Suisse Global Custody Data as at March 31, 2015.
The Credit Suisse Swiss Pension Fund Index (blue line in chart), which was launched with a baseline of 100 at the beginning of 2000, now stands at an all-time high – despite poor performance in January. In the reporting quarter, the index rose by 2.30 points (1.51%) reaching a record high of 154.53 points on March 31, 2015, compared with 100 at the start of 2000. As expected, the SNB decision to remove the EUR/CHF exchange rate cap resulted in a negative return of -1.83% in January. However, the poor start to the year was made good by a solid return of 2.74% in February and a positive return of 0.64% in March, which means that the Credit Suisse Pension Fund Index's upward trend is continuing.
All asset classes with the exception of foreign currency bonds (-0.36%) and alternative investments (-0.09%) contributed to the good result in the first quarter of 2015. The positive return in the reporting quarter was primarily the result of contributions from real estate (0.71%), Swiss equities (0.48%), CHF bonds (0.40%) and foreign equities (0.07%), although both Swiss and foreign equities posted negative results in January. Liquidity also made a positive contribution to performance in the reporting quarter (0.24%), mainly due to gains from current hedging programs in January.
The BVG mandatory minimum rate of return (currently 1.75% p.a.), which also started with a baseline of 100 in January 2000, rose by 0.64 points (0.43%) to 146.81 in the reporting quarter. This means that the return on the Credit Suisse Swiss Pension Fund Index was 1.08% above the BVG target in this quarter.
When interpreting these figures, it must be kept in mind that the Credit Suisse Swiss Pension Fund Index is not an artificially constructed performance index but an index based on actual pension fund data. Consequently, the index is “alive,” which significantly increases its informative value regarding the current investment behavior of Swiss pension funds. On the other hand, the fact that it is constantly revised limits the comparability of data over time. The index is nevertheless an up-to-date indicator, especially as highly accurate pension fund data remains difficult to obtain.