(IPE) Swiss pension funds are looking at equity investments this year with slightly renewed optimist, remaining cautious, however, on bonds, and cutting down on real estate allocations. A strong equity market performance, especially from US tech stocks, led Swiss pension funds to record average returns of 3.7%, as of the end of August 2023, from -9% recorded at the end of last year, according to the latest data from Complementa’s risk check-up.
“As a consequence, the equity quota [in portfolios] has increased more than 1 percentage point compared to the end of last year, and on average stands at around 31%. The bonds [allocation] has remained on average fairly stable at above 31%,” said Andreas Rothacher, senior investment consultant at Complementa.
Last year, Pensionskassen invested 31.7% of their assets in fixed income, 29.5% in equities, 24% in real estate, and 10.1% in alternative investments, while 4.6% was in cash, the study added. The share of real estate estate investments has instead decreased this year to close to 23% as of end of August, according to Complementa’s research. The high allocation to propertty last year was a key driver to slowing down further investments in the asset class this year, Rothacher explained.