SWITZERLAND - The CHF2bn (€1.3bn) multi-employer fund for the Swiss transport industry is back on positive ground with its old strategic allocation.
For the first seven months of 2009 the fund reported a 7.29% return despite a slightly negative first quarter (-1.23%).
Last year the fund returned -10.63% in the same period, which sent the funding level to below 80%.
Although this left the Ascoop fund with no buffers and theoretically no risk budget, the board had decided to stick to the 2008 asset allocation.
“The return necessary for the recovery of the Pensionskasse cannot be achieved with a risk-free strategic asset allocation,” the fund noted earlier this year.
“The trustee board is aware that the strategic asset allocation is not in line with the risk capacities of the fund. The current strategic asset allocation is based on the principle of diversification.”
This meant the fund stuck to its equity split of 8% domestic, 16% foreign, 2% emerging markets and the bond split of 24% domestic and 7% foreign.
For its real estate investments the fund is adding 2% in foreign exposure to its 23% domestic exposure and adds 11% in mortgage loans.
The rest is made up of 4% commodities and 3% cash, with commodities, foreign bonds and foreign real estate being hedged.
As of end-July 2009 the asset allocation was roughly at the strategic benchmark with no asset class more than 1% over or under.
Ascoop has seen concern by its members because of its low funding level and is still hoping for state-aid. (See earlier IPE article: Ascoop’s new fund for employers set on full-funding by 2020)
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