SWITZERLAND - Pension funds in Switzerland returned on average 7% for the second quarter of the year, up from -2.7% in the first quarter, according to a report from InterSec Research.
The Swiss trend mirrors that of Belgium, where pension funds also indicated positive returns for the first six months of the year, recovering from record negative returns for 2002 of -12%.
“We knew that these new quarterly results would be far better than the previous ones, but the magnitude has really surprised us,” commented Peter Leutenegger from InterSec in Zurich.
The year-on-year change was also great, with Swiss pension funds registering average losses of -4.7% in the second quarter of 2002. At this time, pension funds were hit particularly hard by average returns of -20.6% on international equity portfolios.
In the first quarter of 2003, Swiss equities portfolios returned -10.4% on average and international equities brought in -7.9%.
“There are two reasons for this extreme change,” said Leutenegger.
“The first is the economic climate and the second is the internal alignment that pension funds have done over the last few months, or half year, in order to counter the great underfunding that many Swiss pension funds face.
“There were strategic changes, shifts in asset allocation and that, combined with a modest recovery in the economic situation, has led to great improvements.”
Returns over the last 12 months came in at -0.3%, and the three- and five-year annualised results are now at -3.5% and -0.5% respectively.
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