Swiss pension funds are rebalancing gold, aggregate and sovereign bond exposures in light of recent geopolitical crises and rising public expenditure on defence and infrastructure.
The war in Iran exposed the weakening defensive role that gold typically plays in Swiss pension fund portfolios during periods of market stress.
The asset class displayed volatility levels similar to equities, driven by rising oil prices. Pension funds used gold to generate liquidity while rebalancing portfolios or taking profits during periods of market stress.
“This was exemplarily demonstrated during the recent crisis; I assume this trend is likely to continue solidifying,” said Thomas Breitenmoser, head of investment consulting and controlling at consultancy Complementa.
Swiss schemes rebalanced portfolios by selling gold holdings to realise profits, as sharp price increases pushed allocations to the upper end of target ranges, Breitenmoser added during a call this week, presenting the results of Complementa’s 2026 Risk Check-up study.
Despite the volatility and gold’s diminishing defensive characteristics, pension funds are not reconsidering the role of the asset class in portfolios or reducing exposure, given its strong performance in recent years, according to Breitenmoser.
“In the long term, amidst rising inflation, the case for gold remains compelling,” he added.
One of the main topics currently being discussed by boards of trustees at Swiss pension funds is exposure to government bonds, rising sovereign counterparty risk and structural public debt resulting from defence and infrastructure spending in the US and Europe.
“Certainly, one trend currently in fixed income is to move away from international government bonds and global aggregate indices, and to invest exclusively in corporate bonds,” Breitenmoser said.
Equities widen the gap with bonds
Swiss pension funds returned 1.9% year-to-date, recovering from the market correction in March that resulted in a 2.7% decline across portfolios, according to Complementa.
Following the market correction, funding ratios rose again to 115.9% at the end of April, above the 114.5% recorded at the end of last year, the second-highest level in the past 20 years, Complementa figures showed.
Swiss pension funds increased allocations to equities while maintaining broadly stable exposure to real estate and alternatives.
According to Complementa’s study, equity allocations rose by 1.4 percentage points year-on-year in 2025 to 33.9% of more than CHF1trn (€1.07trn) in total assets.
Allocations to alternatives (9.9%) and real estate (22.5%) remained stable, while fixed income allocations continued to decline, falling 1.9 percentage points to 29.2%.
Allocations to foreign assets (49.3%) and foreign currency exposure, at 18.6% after hedging, also remained broadly unchanged year-on-year in 2025, according to Complementa.
