SWITZERLAND – Swiss pension funds are being offered a new bond fund that allows lower sensitivity to interest rates.
Credit Suisse Asset Management said it had added a new investment group to its existing offering to Swiss funds.
The CSA Bonds Plus product “allows the duration (interest-rate sensitivity) of CHF bond holdings to be reduced while delivering returns comparable to those on CHF bond investments”.
“This innovative investment group gives all Swiss pension funds access to state-of-the-art financial instruments without going beyond traditional investment and risk parameters,” it said.
CSA is Credit Suisse Anlagestiftung, or Credit Suisse Investment Foundation.
It called it an “innovative instrument” that uses modern portfolio management tools.
It said: “To reduce duration – and thereby decrease the downside risk from potential interest rate movements – the risks associated with a traditional bond investment are remodelled.”
The fund entails “optimized yield curve positioning and dynamic credit management” as well as derivatives in the form of futures and swaps.
The product complies with BVV2 (Ordinance on Occupational Retirement, Survivors’ and Disability Pension Plans) and, with a maximum allocation of 30% to non-Swiss bonds, is ideal for conforming with Swiss and foreign bond allocation limits.