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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 high level of volatility in the markets is reflected in the Credit Suisse Pension Fund Index, which has fallen back to where it was at the end of January 2015
Performance of Swiss Pension Funds on the Basis of Credit Suisse Global Custody Data as at September 30, 2015.
The Credit Suisse Swiss Pension Fund Index (turquoise line in chart), which was launched with a baseline of 100 at the beginning of 2000, fell by 1.98 points or 1.31% in Q3 2015 and stood at 149.99 points as of September 30, 2015. The Credit Suisse Pension Fund Index thus stands just above where it was at the end of January 2015 (149.45 points). The initially positive start to the reporting quarter with a July performance of 1.87% was wiped out by the month of August with –2.21%, the worst monthly performance in the reporting year to date, followed by September with –0.93%.
As in the second quarter, the largest share in the downturn in the Pension Fund Index was due to the equities asset class, with foreign equities (–1.03%) and Swiss equities (–0.35%) contributing to the negative performance. Liquidity also made a negative contribution of –0.40%, primarily due to the weakening during the quarter of the Swiss franc against major currencies and the associated hedging programs. The positive numbers came from foreign currency bonds (0.22%), Swiss franc bonds (0.12%), and real estate (0.12%), while alternative investments (–0.01%) and mortgages (0.02%) were practically unchanged.
The index of 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 148.09 in the reporting quarter. This means that the return on the Credit Suisse Swiss Pension Fund Index was –1.74% below 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.