Despite a more than 6% return in the first half, Swiss pension funds have no reason to celebrate due to low bond yields, says the Swiss pension fund association ASIP.
Zurich-based ASIP and consulting firm Watson Wyatt reported a 6.2% return for the first six months – driven by strong equity markets. But low bond yields are giving cause for concern.
“In spite of the good news, there is still no reason to celebrate as many funds are still in a tight financial condition,” ASIP and Watson say. They surveyed 71 schemes with assets of more than CHF143bn (e92bn) over 600 portfolios.
“It should also be noted that the 10-year government bond continues to yield less than the BVG-minimum return of 2.5%.” Strong equity returns, positive currency returns and small gains from bonds had “led to one of the best half-year results seen since the beginning of the performance comparison in 2000”.