Pension funds continue to perform well in December
Published: Thursday, Jan 11th 2024, 09:20
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After a good November, pension funds also achieved a positive performance in December. On average, they achieved a return of 1.38% after deduction of fees, as UBS reported on Thursday. In the previous month, it was +2.34 percent. The total return for 2023 was 4.92 percent.
According to the data, the best and worst results were achieved by large pension funds with assets under management of more than one billion francs, with returns of +2.85% and -0.10% respectively in the month under review. The lowest performance margin (+2.32%) was recorded by medium-sized pension funds with assets under management of between CHF 300 million and CHF 1 billion.
In December, the financial markets experienced a month of strong equity and bond performance for the second time in a row, the report continues. Renewed signs of a slowdown in inflation confirmed existing expectations that interest rates will be cut in the first half of the new year.
Specifically, Swiss and global equities rose by 2.46% and 2.06% respectively in December. Swiss francs and foreign currency bonds also rose by 1.22% and 1.07% respectively. Only hedge funds (-2.09%) and private equity (-2.45%) achieved a negative return. According to further information, these were mainly influenced by the weak dollar-franc exchange rate.
Positive year as a whole
Thanks in particular to the strong performance of the financial markets in the fourth quarter, the stock market year 2023 ended on a positive note for equities and bonds. However, the weak USD-CHF exchange rate meant that the performance measured in Swiss francs was lower. The pension funds were therefore unable to recoup the losses from 2022 on average. The return for 2023 totaled 4.92% after -9.58% for 2022.
The benefits of around 100 pension funds of various sizes are included in the calculation.
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