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Special Report

ESG: The metrics jigsaw


Swiss funds see more negative returns in 2002

SWITZERLAND - Swiss pension funds have recorded negative investment returns for the first six months of this year, with a median return of –5.0%. The figures compare to the –2.2% return for the same period in 2001,and +1.5% returned for the whole of 2000, indicating a continued decline.

The data was compiled by the Swiss Pension funds Association (ASIP) and consultant Watson Wyatt from analysis of 65 pension funds with SFR75bn (e51bn) in assets. Direct real estate investments and alternative investments were not included in the analysis so total returns of pension funds can be expected to be slightly higher, although still significantly below returns for the first half of 2001.

Declining equity markets are once again being blamed for the poor performance of funds. The median performance of Swiss equity composites for the last six months was –6.4%.

Swiss funds were expected to change the amount of assets allocated to equities in the first quarter of this year, as the median annualised performance target for many of them had fallen below the government’s 4% minimum. The data shows, however, that equities as an overall percentage of total assets has declined only marginally this year. According to Oliver, Wyman and Company and UBS Warburg, Switzerland’s investment funds allocated an average 40% to equities in 2001.

Low returns in equities have been counterbalanced by positive returns from Swiss fixed income. The median return for this asset class was +3.3%.

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