The strengthening Swiss franc dampened Swiss pension fund returns in the first half of 2011, according to figures from pension fund association ASIP, while attention switched to currency management.

"The strong Swiss franc has meant Pensionkassen must pay further attention to the issue of currency management," ASIP said in the report.

Daniel Thomann of Aon Hewitt Switzerland had previously warned that despite a lower exposure to foreign equity, the country’s pension funds would suffer from the higher currency risk as a result of the strengthening Swiss franc.

Both direct and indirect Swiss real estate posted positive median returns in the first six months of the year, with 2.3% and 3.5%, respectively. Latter was also the best return posted by any asset class, compared to losses across all equity investments.

Swiss funds reported median equity returns of -1.9%, while the lowest point between January and June saw foreign equity holdings returning -7.4%, before reaching a median return of -5.4% by the end of the second quarter.