SWITZERLAND - Swiss pension funds, known as Pensionskassen, are on track to at least matching their average return of 6.58% for 2006, according to data supplied by Credit Suisse.
Credit Suisse calculated Pensionskassen generated an average return of 3.3% in the first half of 2007 - slightly more than half the 2006 figure so if current trends continue, the schemes' 2006 return will be matched.
Moreover, the Swiss bank said for the first time in six years, all Pensionskassen it monitored - from at least CHF150m (€90m) in assets to more than CHF1bn - had beaten the industry benchmark.
The bank attributed the strong performance in the first half to continued positive equity markets, adding "the overview confirms that pension funds that accepted a higher risk are earning a higher return".
Credit Suisse also said the strong performance lifted the schemes' assets by CHF11bn to a total of CHF635bn on June 30.
The bank also said on June 30, the Pensionskassen had 31.9% of their assets in equities, including a foreign exposure of 17.1%, while schemes also allocated 36.6% of assets to bonds, including 27.7% denominated in Swiss francs and 8.9% denominated in foreign currency.
Real estate allocations totalled 14.4% and those to alternatives - whether hedge funds, commodities or private equity - amounted to 4.2% of their allocation while cash made up 8.2% of assets and mortgage-backed securities amounted to 4.5%.
With the exception of alternatives - which rose to 4.2% on June 30 from 2.9% a year earlier - the schemes' asset allocation is roughly the same as it was a year ago.