SWITZERLAND - In the first half of 2006 a sample of Swiss pension funds achieved a net overall performance of just under 0.6%, against 5.6% a year before.
The figures were released as the result of the seventh Lusenti study in which 164 institutional investors with total assets of CHF187bn participate.
"The disappointing results can be largely explained by significant losses on foreign-currency bonds and Swiss-franc bonds (posting performances of minus 2.8% and 1.8% respectively)," a press release stated. These results could only be partly offset by positive performance of equity and real estate.
Swiss shares returned 3.8% and foreign shares only 0.2%. Direct and indirect real estate investments returned 2.5% and 3% respectively.
Alternative investments lagged slightly behind shares and real estate, with an average performance of around 1%.
Hedge funds (just under 2%) did better than private equity (0.7%) and commodities (1.4%), the study shows.
Among the institutional investors there was a trend to go out of Swiss-franc bonds into direct real estate which increased their share of total assets increasing to 11.7%. Foreign currency bond exposure also increased to 12.9%.
Public-sector pension institutions had a funding ratio of 96.6% at midyear, while private-sector institutions have a funding ratio of around 108.9%. "The financial equilibrium of the institutions polled remained stable in the first half of the year and showed only a slight change compared with the end of 2005", the study remarked.