Credit Suisse Swiss Pension Fund Index reaches all time high

The Credit Suisse Swiss Pension Fund Index reached an all-time high at the end of December 2016.

After a subdued start to the fourth quarter, the index advanced by 1.29 points (0.81 per cent) to reach an all-time high of 159.91 points, from a baseline of 100 at the start of 2000. After a drop in October (-0.72 per cent) the index recovered in November (0.16 per cent), before staging a remarkable final surge in December (1.38 per cent).

The Credit Suisse Swiss Pension Fund Index is calculated on the basis of the returns realized by Swiss pension funds (prior to deducting management costs) whose assets are held at Credit Suisse under a global custody arrangement.

Asset management and advisory tasks, however, are performed by the pension funds themselves or by third parties. In its role as global custodian, Credit Suisse has no influence on the performance of individual pension funds.

As in the previous quarter, the bulk of the advance for the Credit Suisse Pension Fund Index was due to foreign equities (0.92 per cent); this was followed by Swiss equities (0.15 per cent), alternative investments (0.13 per cent), real estate (0.13 per cent), others (0.04 per cent), and liquidity (0.00 per cent). Swiss bonds (-0.52 per cent), foreign currency bonds (-0.04 per cent), and mortgages (-0.02 per cent) made negative contributions.

A look back over the year shows that all asset classes made a positive contribution, especially foreign equities (1.58 per cent), real estate (1.17 per cent), and Swiss bonds (0.43 per cent).

The BVG mandatory minimum rate of return (1.25 per cent p.a. since January 2016) rose by 0.47 points (0.31 per cent) to 150.59 points in the reporting quarter, likewise from a baseline of 100 at the start of 2000. The return of the Credit Suisse Swiss Pension Fund Index is therefore 0.50 per cent above the BVG requirement in the reporting quarter.

The annualized return on the Credit Suisse Swiss Pension Fund Index (since January 1, 2000) is 2.80 per cent as of December 31, 2016. This contrasts with an annualized BVG mandatory minimum rate of return of 2.44 per cent.

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