The compenswiss fund – the umbrella fund for Swiss first-pillar scheme AHV/AVS, among others – has reported a slightly negative return of -0.77% for 2015.

Assets under management increased from CHF33.1bn (€27bn) in 2014 to CHF33.6bn a year later.

In a statement, the fund claimed the return “would have been better” had it made more direct investments in domestic real estate.

Due to its “low-risk profile”, the fund had allocated just 0.3% to the asset class, as of the end of 2015.

This allocation, it said, was not set to change in the near future, “at least not until the negative inflow into the AHV/AVS is reversed”.

It added that the fund’s conservative asset allocation had to “fulfil the high liquidity demands of the three buffer funds”.

Another contributor to the negative performance was the Swiss federal bank’s removal of the peg to the euro at the beginning of 2015.

Compenswiss said the negative interest on its “necessarily high” cash holdings could be “kept to a minimum” with good risk management.

As at the end of 2015, liquidity made up just over 10% of the portfolio, while the lion’s share – approximately 45% – was invested in bonds, mostly non-domestic.

The compenswiss scheme is facing a difficult time, as money for the first pillar will now be withdrawn based on demographic developments.

The government is seeking to offset the draining of the fund by increasing the VAT part used to fill the first-pillar buffer scheme.

This proposal is currently being negotiated as part of the Altersvorsorge 2020 reform package and will eventually have to pass a public referendum.

Meanwhile, a new chairman of the board is taking over at compenswiss.

Marco Netzer is leaving as scheduled after serving two four-year periods in the position.

He has been replaced by Manuel Leuthold, who joins from Edmond de Rothschild in Geneva, where he was group chief administrative officer.