The performance spread between Switzerland’s largest public pension fund Publica and the Pensionskasse for the city of Berne was as large as 580 basis points over the course of 2013, due to their differing approaches to asset allocation.

Last year, the average return for Swiss pension funds, according to a number of sources, was approximately 6%.

The CHF35.8bn (€29bn) Publica Pensionskasse, which only managed to generate a 3.5% return over the period, cited its “commitment” to emerging markets and commodities.

According to its investment strategy, equities currently comprise about 33% of Publica’s overall portfolio, with 10% of equity exposure allocated to emerging markets, which underperformed relative to Swiss or developed-market equities last year.

The pension fund also noted that its “conservative” approach to European bonds, where it invests solely in core Europe, had an impact on its portfolio’s performance.

Further, emerging market debt, comprising 5% of Publica’s strategy, lost 15%, while commodities fell by 12%.

Gold, which accounts for 2% of Publica’s portfolio, fared particularly badly, the pension fund said.

Nevertheless, Dieter Stohler, managing director at Publica, told IPE “it would be wrong to exit these investments based on a short-term valuation loss”.

He said: “We are expecting positive returns over the long run in those sectors, with a horizon beyond the end of the year.”

However, he acknowledged that Publica was now re-evaluating its asset strategy regularly every two years, which meant “there might be one or two adjustments”.

But he rejected a full exit from either emerging markets or gold.

At the other end of the spectrum, the BPK, the public pension fund for the Swiss city of Berne, returned 9.3% over 2013.

The fund’s equity exposure, 38%, was the main driver for the strong performance, it said.

Hans-Peter Wiedmer, head of asset management at the CHF10bn Pensionskasse, said “very good tactical and operational implementation”, as well as “very low asset management costs”, also boosted returns, which raised the funding level to approximately 83%.

For 2014, the BPK does not plan any major changes to its strategy. It said it would keep equity exposure at around the same level, with “frequent rebalancing”.

Similarly, the PKE, the pension fund for the Swiss energy sector, reported a return of 8.8%, similar to the 2012 return of 8.7%.

Following a strategic review, the CHF5bn scheme reduced its equity allocation in 2012 from 42% to around 39% in favour of a slight increase in alternatives and FX bonds.

In 2013, “all asset classes had contributed positively” to the performance, apart from foreign bonds, according to Ronald Schnurrenberger, managing director at the PKE.