Pension provision October brings losses for Swiss pension funds

Swiss pension funds recorded a negative performance in October, mainly due to weak Swiss equities. Despite these setbacks, the annual performance remains positive.

Swiss pension funds suffered an average negative performance in October, as reported by UBS. The more than 100 pension funds surveyed achieved an average return of -0.59 percent on their pension assets under management after fees. This is the second month this year with negative results, after a negative return of 0.91% was recorded in April. Nevertheless, the annual return for 2024 so far is up 6.20%.

Swiss equities weigh on returns

The main reason for the weak performance in October was Swiss equities, which fell by 3.46%. In contrast, hedge funds and private market investments achieved positive results with returns of 2.26% and 1.60% respectively. The performance of pension funds varied greatly, from -1.52% to +0.23%. Smaller funds with less than CHF 300 million in assets under management performed worse at -0.66% than larger funds with over CHF 1 billion, which recorded -0.58%. The smallest losses were suffered by funds with assets between CHF 300 million and CHF 1 billion, at -0.51 percent.

Outlook for the coming months

The UBS experts expect "bouts of volatility" on the markets in the coming months. Investors should prepare for lower interest rates, which, in combination with solid economic growth, could create a supportive environment for equities and bonds. This assessment suggests that positive developments are possible despite the current challenges.

SDA