Swiss Pension Funds shows a divergent start to 2024, with performances ranging widely amidst market uncertainties.

The Swiss pension fund sector experienced a varied commencement in 2024. After a positive 2023. According to UBS’s monthly analysis of approximately 100 Swiss pension funds, the average performance in January stood at 0.48%, post-fee deductions. However, the performance spectrum was broad, with a 1.54 percentage point disparity among the funds.

A medium-sized fund, managing assets between CHF 300 million and CHF 1 billion, led the performance chart with a 1.31% gain. Conversely, a significant fund, overseeing assets above CHF 1 billion, lagged with a -0.23% return. Medium-sized funds exhibited the narrowest performance margin at 1.2 percentage points, hinting at a more stable outcome within this group.

Asset class performance was mixed, with global equities and hedge funds leading with average gains of 1.77% and 1.73%, respectively. Both private equity and Swiss equities also surpassed the 1% return mark. However, Swiss franc bonds faced a downturn, posting a -0.40% return, reflecting the broader bond market’s challenges amid rate hike uncertainties by the US Federal Reserve.

UBS notes the strong start of global equity markets in 2024, tempered towards the month’s end by the Fed’s rate cut ambiguity, affecting European and US bond performances negatively.

Credit Suisse’s pension fund index echoed UBS’s findings, showing a similar trend with a 0.54% increase in January. The growth was mainly attributed to foreign and Swiss equities, with real estate also contributing positively, although Swiss franc bonds underperformed.

This start to 2024 underscores the inherent volatility and uncertainty within the pension fund sector, highlighting the need for cautious optimism among investors and fund managers alike.

©Keystone/SDA