Compenswiss, the umbrella organisation for the mandatory Swiss first pillar scheme AHV/AVS, posted a return of 3.93% in 2016, after deductions for hedging.
The performance without hedging amounted to 5.26%, which Compenswiss described as “very good”. Last year the umbrella fund posted a loss of 0.77%.
It said that its funds achieved satisfactory results despite a challenging financial environment in 2016, citing uncertainty surrounding the UK’s vote to leave the European Union, and the US presidential election.
This comes on top of “an already unusual interest rate environment”, which has meant negative yields on a large proportion of Compenswiss’ bond investments, it added.
All-in costs amounted to 0.18% for 2016.
As at the end of December Compenswiss had CHF34.8bn (€32bn) of assets under management, the vast majority (93%) is in its “market” or investment portfolio.
It also held CHF2.4bn in a liquidity portfolio, which made a loss of 0.04%.
Compenswiss said this was a satisfactory result given the current situation and that it was due to active liquidity management, which minimised the impact of negative interest rates.
The majority of Compenswiss’ market portfolio is in fixed income. As at the end of December, 45.6% was allocated to foreign currency interest-bearing investments and 19.3% to Swiss franc bonds and loans. The equity allocation was just shy of 24%, with nearly 7% allocated to indirect real estate, 0.9% to commodities and 3.4% to money markets.