Switzerland’s AHV fund is shifting to physical gold for the commodity exposure in its CHF35.2bn portfolio. At the end of last week the first pillar buffer fund tendered a custodianship and storage for CHF700m in gold bars via IPE Quest.
The bars are to be stored in Switzerland either collectively or individually, the tender states. The tender marks a shift in the investment strategy for AHV/AVS, as it previously only invested in gold and silver via swaps.
“The supervisory board has decided we are to invest in physical gold bars from now on,” the fund told IPE in a statement. In 2016 the supervisory board of the buffer fund decided to raise its the commodities exposure from 1% to 2% while divesting from energy-related commodity exposure.
The fund explained last year that gold was better suited to add “diversification and hedging in certain situations (inflation or recession)” than the previously preferred energy commodities.