SWITZERLAND – Swiss institutional investors had returns of 2.29% in the first three months of the year, according to a survey by Lusenti & Partners.
The survey, sponsored by Credit Suisse Asset Management, was carried out on a sample of 145 institutional investors with total assets of CHF153bn (€98.5bn).
The first quarter returns follow a 4.28% return recorded for 2004.
The 2004 survey was based on 174 schemes, mainly large institutional investors, with a total wealth of CHF214.7bn.
In the first quarter of 2005 public pension providers returned an average 2.42%, while private ones came in at 2.45%.
Swiss equities had the best performance, ranging from 4.1% to 5.6%. Foreign equities yielded between 2.4% and 4.3%.
Alternative assets yielded 0.9-2.1%, with real estate, both direct and indirect investments, ranking first in the sub-group. Hedge funds and commodities returned 1.8% and 1.5% respectively.
“In spite of the good results, the average solvency ratio is practically identical to end of 2004,” the survey remarks.
And the survey participants say that they will be “very cautious” in the next twelve months, as a small increase in interest rates is expected in all currencies.
Respondents didn’t envisage a bond market crash but placed equity returns “at the lower end of the single digits”.
But they supported greater transparency, in view of the new Swiss GAAP/FER 26 accounting standard to be implemented by the end of this year. The new standard is expected to enhance transparency in the second pillar.
“The standard is regarded positively as a whole by the participants, bringing greater clarity and consistency in terms of valuing direct real estate investments and bonds and calculating the required fluctuation reserves,” the survey reports.