Pension funds achieve a return of 1.2 percent in the third quarter
Published: Monday, Nov 4th 2024, 11:30
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Swiss pension funds benefited from the positive sentiment on the financial markets in the third quarter of 2024. On average, they achieved a return of 1.2% on their investments, according to the latest Swisscanto Pension Fund Monitor.
Thanks to the strong performance in the first half of the year, the return for pension funds from the beginning of January to the end of September now averages 7.7%.
Despite several phases of increased volatility, the financial markets continued their slight upward trend in the third quarter, writes ZKB subsidiary Swisscanto in a press release on Monday. Thanks to the solid performance in the majority of asset classes, the average pension fund even achieved a higher return than in the second quarter (+0.77%).
The escalating geopolitical unrest, elections in France and the UK and the first precursors to the US presidential election had caused nervousness. However, the situation on the stock markets calmed down again with the interest rate cuts by the US Federal Reserve and the ECB.
Looking at the individual asset classes, only commodities performed negatively in the third quarter. Meanwhile, Swiss equities performed slightly better in the quarter under review than the global equities category, which only gained slightly.
Since the beginning of the year, the global equities (+19.6%) and Swiss equities (+11.5%) categories have performed very strongly. The other asset classes, such as bonds in Swiss francs or other currencies, real estate and commodities, also all posted positive returns.
Coverage ratios further improved
In line with the positive development, the coverage ratios of the pension funds have also improved further. According to Swisscanto, these climbed by a further 0.7 percentage points in the private-law funds in the third quarter, reaching an average of 120.7% at the end of September. More than three quarters of the funds have a coverage ratio of over 100%.
The asset-weighted coverage ratios of public funds also continued to rise slightly: According to Swisscanto, those with full capitalization now had a value of 113.0% as at the end of September 2024, while those with partial capitalization had a value of 90.1%.
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