SWITZERLAND - Domestic real estate and alternatives asset classes helped Swiss pension funds limp to a 2.3% average return over 2007, according to Lusenti Partners' 10th annual survey.
Lusenti Partners said: "Some of the most representative asset classes in the portfolios, i.e. Swiss stocks and bonds denominated in CHF, did not have very good performances, i.e. close to 0%, while foreign stocks and bonds denominated in foreign currencies outperformed their domestic counterparts."
On average, commodities, private equity and hedge funds contributed 11%, 8.3% and 5.6% respectively to the industry returns.
The survey showed Swiss pension funds had continued to be overweight in cash showing a cautious approach to the market. It remained underweight in domestic bonds due to their sustained low yields.
Pension funds reported little impact of higher volatility on their portfolios. The average rate reached 6.9% at the end of 2007, only up 0.3% from the end of the previous year.
Lusenti Partners conducted the survey during the first quarter 2008. It polled 155 institutions with total assets of CHF239bn, accounting for around 40% of Swiss pension fund assets as of 31December 2007.
The average size of the respondents was CHF1.542bn.
For an in depth report on current Swiss pensions trends see www.globalpensions.com
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