SWITZERLAND - Swiss institutional investors are gearing the majority of investment categories strongly towards long-term strategic aims, a new survey has found.
The Swiss Institutional survey, conducted by pension expert Graziano Lusenti (pictured) in conjunction with Credit Suisse Asset Management, found that in their tactical positioning, respondents were gearing towards strategic asset allocation with the only exceptions being liquidity (overweight) and CHF-denominated bonds (underweight).
In addition, the survey found alternative investments still only account for a small proportion of total asset allocation at 3%, most of which goes to hedge funds, Lusenti Partners said in a release.
According to the survey, some 39% of respondents said they currently used alternative investments with a further 15% intending to use them in the near future. But 33% said they would continue to refrain from using these investments and 13% made no comment.
Private equity was muted as the best alternative investment performer over the next five years, with an expected return of 7.9% followed by hedge funds (6.5%), commodities (4.9%) and precious metals (2.7%).
The respondents’ fluctuation reserves averaged below 5% with many institutionals too low to cope with the effects of another slump in equity markets or even in the bond or real estate markets in the event of interest rate hikes, Lusenti Partners noted.
The majority of respondents expected interest rates to rise within a year with 67% believing the Swiss and US rates would go up and 55% predicting the ECB would raise rates.
The survey took in the responses of 202 Swiss institutional investors with combined assets under management of CHF185bn (e120bn).
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers