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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.
Pleasing start to the 2014 investment year
Performance of Swiss Pension Funds on the Basis of Credit Suisse Global Custody Data as at March 31, 2014.
The Credit Suisse Swiss Pension Fund Index (blue line), which began with a baseline of 100 at the beginning of 2000, has made a successful start to 2014, rising by 2.50 points (1.77%) to a total of 143.80 points as of March 31, 2014. February made a major contribution of 1.12% toward the result for the first quarter, while January and March came in well under the 1% mark at 0.16% and 0.48% respectively. Compared with the outstanding first two quarters of 2012 (3.01%) and 2013 (3.48%), the start to the 2014 investment year was a bit lower. However, when we compare the result of Q1 2014 with the prior quarter (Q4 2013: 1.56%), we see a small increase.
Notably, in Q1 2014 all asset classes showed positive performance. In particular, Swiss securities, bonds in CHF (0.44%), and Swiss equities (0.61%) made a large contribution to this result.
The BVG mandatory minimum rate of return (currently 1.75%), which also started with a baseline of 100 as of January 2000, rose by 0.62 points (0.43%) to 144.29. This means that in the first quarter of 2014, the return on the Credit Suisse Swiss Pension Fund Index was 1.33% above the BVG target. The difference between the BVG mandatory minimum rate of return and the Credit Suisse Swiss Pension Fund Index has narrowed considerably and as of March 31, 2014 stood at just 0.49 points (Q4 2013: 2.36 points). At the end of the quarter, the annualized return of the Credit Suisse Swiss Pension Fund Index (since January 1, 2000) was 2.58%, compared to the annualized BVG mandatory minimum rate of return of 2.61%.
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.