SWITZERLAND - The Fonds de compensation de l'Assurance -Vieillesse et Survivants (AVS) sustained losses of Sfr1.016bn in 2002, attributed to the downward trend in equity markets.
The fund’s overall allocation to equities at the end of 2002 was 20.4%, adjusted from the January 2002 allocation of 24.8%, but falling far short of the target of 40% it originally set in place.
At the end of 2002, AVS had 11 equity mandates, valued at Sfr3.875bn in total. Five were Swiss equities, valued at Sfr1.311, three to international equities, worth Sfr2.153bn and Sfr411 was devoted to US equities and small caps, spread between three mandates.
The Swiss equities mandates returned -26.9%, underperforming the benchmark by 0.8% and the international equities mandates incurred losses to the tune of -33.3%, which was 0.1% above the benchmark.
On the Swiss fixed income side, the allocation remained high at 67.5% above a target of 40%. AVS almost doubled its holdings of foreign fixed income securities from 6% of the total fund in January to 11% in December, still short of the 15% target.
Fixed income assets had an aggregate value at the end of 2002 of Sfr6.406bn, of which 82% was managed internally and two mandates were held by external asset managers. Short duration bonds registered a return of 2.6% and bonds over 24 months in duration brought in 10.2%.
The scheme remained underfunded in 2002, as it has done since 1979, said the annual report.
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