Swiss pension funds posted a “strong recovery” in April, delivering an average return of 2.3 per cent, up from -2.4 per cent recorded in March, according to the latest Swisscanto Pension Fund Monitor.

The rebound meant that schemes were in positive territory for the year to date, with the average performance reaching 1.8 per cent by the end of April.

Funding levels also improved on the back of the positive market environment.

The asset-weighted funding ratio of private sector pension funds rose to 121.2 per cent, close to its recent peak at the end of February (122 per cent), and up from 119.3 per cent at the end of March.

Public sector schemes with full capitalisation reported a funding ratio of 114.9 per cent, while partially capitalised funds had an average funding ratio of 92.3 per cent.

Swisscanto said the recovery was driven primarily by a sharp upswing in equity markets. Foreign equities led the gains with a return of 7.7 per cent in April, outperforming Swiss equities, which rose by 4 per cent.

On a year-to-date basis, foreign equities were up 6.1 per cent, compared with 1.8 per cent for domestic stocks.

Real estate also contributed to performance, as indirect Swiss property investments returned 3.8 per cent in April, significantly outpacing direct real estate, which rose by 0.4 per cent.

Despite ongoing geopolitical tensions in the Middle East and continued disruption in the Strait of Hormuz, markets rallied strongly during the month, Swisscanto stated.

Investor sentiment was supported by signs of de-escalation in the region, helping push equity markets to new highs even as oil prices remained above USD 100 per barrel.

Looking ahead, market attention is shifting towards structural growth themes such as artificial intelligence (AI) and investment in data centres. Semiconductor stocks surged by nearly 50 per cent in April, although some analysts now view the sector as overbought.

Swisscanto said it continues to expect accommodative monetary policy, which is likely to remain supportive of equity markets in the near term.

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