SWITZERLAND - The Pensionskasse for the Swiss city of Luzern reported a negative result of 10.3% for 2008, as a result of massive losses from its equity and alternatives exposure.

The return is well above the Swiss average of -13% despite equities returning -42.9% and the fund's alternative portfolio -18.9%. (See earlier IPE story: Swiss funds hit historic returns low)

What saved the fund was positive performance in real estate, delivering a return of 4.2%, as well as 3.1% fom loans and 0.5% through fixed-income investments.

The fund has now announced it will change its strategic asset allocation slightly by lowering the alternatives portfolio from 10% to 8% and increasing its real estate exposure from 22% to 25%.

Equities will also make up 22% instead of 25% of the strategic asset allocation, while at year-end 2008 the exposure was held at 18%.

The fund's total assets declined from CHF4.8bn (€3.2bn) to CHF4.3bn while its funding level dropped from 105.5% to 91.9%.

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