SWITZERLAND - Only half of Swiss pension funds are hedging their currency exposure, according to Lusenti Partners' Swiss Institutional Survey.
Some 40% of respondents did not take any action to hedge against the US Dollar, 48% did not hedge against the Euro and 62% did not feel it necessary to manage their positions in other currencies.
Where action was implemented, it was either delegated to outside briefs and fund managers and actively managed under a currency overlay program or in the form of occasional and opportunistic hedging.
The survey also showed most pension funds made few tactical decisions, but were disappointed by the results. However, pension funds preferred specialised management by asset class over balanced management.
At a time of falling markets over half (55%) of institutions took tactical action which featured either overweighting or underweighting asset classes.
However, automatic rebalancing, was applied by 28% of respondents, while 22% increased their cash positions and 20% preferred to sit tight and take a passive approach.
Only minorities changed their strategic allocation (9%), changed managers (10%), or hedged via derivatives (15%) or guaranteed-capital structured products (7%).
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