The asset allocation strategy of Swiss public sector pension funds does not differ substantially from that of private sector schemes, according to a survey on pension funds owned by public institutions in Switzerland.
The average proportion allocated to equities amounts to 27% – 16% Swiss, 11% foreign. The exposure of fixed income investment is 28%, 15% is invested in real estate and 8% in mortgages.
“In my opinion, the most important finding of this survey is that public and private sector pension funds in Switzerland are not that far away from each other in terms of investment strategies,” says Peter Meier, chief executive officer at Zurich-based Swissca Portfolio Management. This group conducted the survey with Prevista Anlagestiftung in co-operation with the Swiss Association of Pension Funds.
A total of 43 pension funds participated in the survey, including the pension fund of the Swiss confederation, 15 cantonal schemes and 25 different municipalities, representing a total of 313,000 active members and 125,000 retirees.
The results of the study show that investment foundations, provided by the Cantonal banks and the Swiss large banks, are still extremely popular among the public sector pension funds. Only three participants do not include these investment vehicles in their portfolio.
Three quarters of the respondents have stated that they are to use investment funds but only one third foresee increasing their portfolio exposure to fund investing.
Around 50% of the participants indicate that they are active in alternative investment sector, of which two thirds invest in private equity and one third in hedge funds.