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Zurich scheme cites Brexit as it reports ‘disappointing’ performance

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The CHF16.6bn (€13.6bn) Swiss pension fund for the city of Zurich (PKZH) lost 3.3% over the course of 2018.

The result for the Pensionskasse for employees of local authorities was only slightly below the market average calculated by Credit Suisse (-3.2%). 

As with other Pensionskassen, PKZH blamed the losses on a “disappointing investment year”, mainly due to falling equity markets.

In a press release the PKZH specifically named Brexit as a major cause for the stock market downturns.


According to the fund, the losses on the equity markets were caused “among other things by rising US interest rates, the end of monetary easing in the US and the uncertain political situation in Europe (keyword ‘Brexit’)”.

Along with the equity exposure PKZH’s fixed income investments also posted losses because of the same market factors, it said.

PKZH’s equity exposure fell more than 10%, while the fixed income segments lost 2%.

Only private equity, with a gain of 13.3%, and domestic real estate (up 3.7%) mitigated the losses for PKZH.

Overall, its funding level fell by 690 basis points to 100.9% year-on-year.

The calculations are preliminary as finalised numbers will only be published in the annual report, expected for early June.

ESG strategy in implementation

The PKZH is currently implementing a new ESG strategy decided upon in autumn 2018.

According to its “climate strategy”, the carbon footprint of its equity investments is to be reduced to “improve the return-risk quota of the equity investments with regard to climate risks”.

The pension fund wants to reduce the carbon footprint of all its equity exposure to 50% of that of the MSCI All Countries World index.

PKZH plans to exclude coal producers and other coal-intense industries, increase its role as an active shareholder, and shift to sectors with lower carbon footprints.

The pension fund also named “using active fund managers” as one of the ways to lower the carbon footprint of its portfolio, as they had a better track record in that field than most index funds.

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  • Sunset in Zurich, Switzerland

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