Swiss pension schemes are pushing into the mortgage market in an attempt to counter the sudden strengthening of the franc in January and negative government bond yields.
Half of 35 pension schemes examined in a study by the Zurich University of Applied Sciences are assessing whether they should provide mortgages for members for the first time, according to Regina Anhorn, researcher at the university.
Ms Anhorn added that 11 of the pension schemes, which collectively oversee SFr220bn ($214bn) of assets, already sell mortgages to members.
Some of these have also recently started selling mortgages to non-members as the search for yield intensifies, pushing their mortgage exposure up from 2 per cent of assets to 7 per cent.
Reto Hintermann, pension fund expert at Gam, the Swiss-listed fund house, said: “Pension funds are looking to replace their Swiss bond [holdings] with mortgages. This project is difficult to implement. It can be costly and [mortgages] give a low yield of 0.2-0.4 per cent. But at least that is positive, which is better than what you achieve in the bond market.”