Swiss pension funds recorded a modest increase of 0.1 per cent in the first half of 2025, according to research from Swisscanto, and remained largely resilient despite ongoing market turbulence, supported by strong financial reserves.

The best-performing asset classes were Swiss stocks and Swiss real estate, which gained 6.9 per cent and 2.1 per cent, respectively.

Swiss real estate, both direct and indirect, contributed 0.9 per cent to overall returns, while Swiss bonds added 0.8 per cent.

In contrast, other commodities and unhedged global bonds posted the weakest results, declining 7.2 per cent and 5.8 per cent, respectively.

Swisscanto noted that coverage ratios for private pension funds fell during the same period.

The report also found that the estimated coverage ratio of private pension funds declined from 121.5 per cent at the end of March 2025 to 115.9 per cent at the end of June 2025.

Capitalised private pension funds also saw a decline, from 113.8 per cent to 110.3 per cent.

At the end of June, 63.8 per cent of private pension funds maintained a coverage ratio of at least 115 per cent, down from 81.8 per cent in the first quarter.

Despite all private funds previously maintaining at least 100 per cent coverage, 0.8 per cent have now fallen below this threshold. In contrast, all public pension funds remain above 100 per cent, with 45.2 per cent fully funded.

Zürcher Kantonalbank investment writer asset management, Roberto Stefano, highlighted the impact of financial market volatility in the second quarter, suggesting that the market saw a “slump” after US President, Donald Trump, threatened high tariffs, then quickly recovered when the tariffs were postponed.

He added that renewed geopolitical tensions in the Middle East also influenced the markets, though a ceasefire later eased concerns.

Stefano described recent market movements as a “roller-coaster ride,” noting that uncertainty is increasing again with the expiration of the 90-day tariff deadline.

Swisscanto concluded that while Swiss pension funds have so far withstood financial market turbulence, questions remain about whether they can maintain their resilience if volatility continues.

---