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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.
A year marked by high levels of volatility on the markets nevertheless ends with a positive result for the Credit Suisse Swiss Pension Fund Index.
Performance of Swiss Pension Funds on the Basis of Credit Suisse Global Custody Data as at December 31, 2015.
In the reporting quarter, the index rose by 3.68 points (2.45%) and stood at 153.67 points on December 31, 2015, as compared with 100 at the start of 2000. After substantial gains in October (2.70 %), month-on-month performance in November was weaker (0.97 %), and December produced a negative contribution (-1.20 %). This means that the Credit Suisse Swiss Pension Fund Index delivered a positive return for the year (0.95 %) for the fourth time in a row. However, there is a definite decline compared with the results of previous years (2014: 7.73 %, 2013: 5.76 %, 2012: 7.21 %).
In the reporting quarter, all asset classes with the exception of liquidity (-0.13 %) and mortgages (0.00 %) contributed to the positive performance. The largest share of the increase in the Credit Suisse Swiss Pension Fund Index was in the foreign equities asset class (1.21 %), followed by Swiss equities (0.75 %), and real estate (0.46 %). Returns on foreign currency bonds, Swiss franc bonds, and alternative investments were relatively low (0.12 %, 0.01 %, and 0.03 % respectively).
It is notable that real estate (1.05 %), Swiss equities (0.52 %), Swiss franc bonds (0.23 %) and mortgages (0.03 %) contributed to the positive result for the year as a whole, while foreign equities (-0.36 %), foreign currency bonds (-0.34 %), alternative investments (-0.13 %), and liquidity (-0.11 %) were all negative.
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 148.73 in the reporting quarter. The return of the Credit Suisse Swiss Pension Fund Index is thus 2.02 % above the BVG target in the reporting quarter, but -0.80 % below the
BVG target over the full year.
The annualized return of the Credit Suisse Swiss Pension Fund Index (since January 1, 2000) at 2.72 % as of December 31, 2015 remains above the annualized BVG mandatory minimum rate of return of 2.51 %.
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.