Global Custody Solutions Credit Suisse Swiss Pension Fund Index

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. 

Credit Suisse Swiss Pension Fund Index
Q4 2018

 

Q4 2018: –3.50%

 

Major losses for Credit Suisse Swiss Pension Fund Index in fourth quarter of 2018

In the fourth quarter, the Pension Fund Index fell by 6.07 points, or –3.50%, to close at a level of 166.96 points at the end of December, from a baseline of 100 at the beginning of 2000. This gives an annual performance of –3.20% for 2018. After a weak performance at the start of 2018, the Pension Fund Index made up some ground again in the second quarter and continued to advance slightly in the third quarter. The Swiss pension funds nevertheless suffered substantial losses in the fourth quarter. The months of October (–1.35%) and December (–2.15%) had a particularly negative effect on the overall result (–3.50%). The only exception was November, which was almost neutral at –0.04%.

Equities accounted for the lion’s share of the negative performance in the fourth quarter. Swiss equities achieved a return contribution of –1.41%, while foreign equities contributed –2.23%. Bonds delivered a mildly positive performance. With a total contribution of 0.19%, they enabled an even more negative result to be avoided. Real estate also showed a slightly positive impact (0.11%), although this was wiped out by the decline for alternative investments (–0.10%). Mortgages had only a minor impact on the overall result.

Performance contribution (quarterly)
Credit Suisse Swiss Pension Fund Index (1.1.2018-31.12.2018)
  Q1 18 Q2 18 Q3 18 Q4 18 2018
Liquidity -0.02% -0.13% 0.05% -0.02% -0.13%
CHF bonds -0.15% -0.06% -0.13% 0.16% -0.17%
Foreign currency bonds -0.05% 0.01% -0.12% 0.03% -0.13%
Swiss equities -0.65% 0.22% 0.54% -1.41% -1.32%
Foreign equities -0.47% 0.64% 0.39% -2.23% -1.70%
Alternative investments -0.01% 0.05% -0.01% -0.10% -0.08%
Real estate 0.03% 0.15% 0.07% 0.11% 0.36%
Mortgages 0.00% 0.00% -0.01% 0.02% 0.02%
Other -0.01% -0.03% 0.03% -0.05% -0.05%
Total -1.33% 0.85% 0.80% -3.50% -3.20%

The index of the BVG mandatory minimum rate of return (1% p.a. since January 1, 2017) rose by 0.38 points (0.25%) to 153.62 points in the reporting quarter from a baseline of 100 in January 2000. The return of the Credit Suisse Swiss Pension Fund Index is therefore –3.75% below the BVG requirement in the fourth quarter of 2018.

The annualized return on the Credit Suisse Swiss Pension Fund Index (since January 1, 2000) amounted to 2.73% as of December 31, 2018. This contrasts with an annualized BVG mandatory minimum rate of return of 2.29%.

Pension funds with assets of between CHF 150 million and CHF 500 million once again achieved the highest annualized return (since January 1, 2000) as of December 31, 2018, at 2.93%.