A rarely toxic cocktail of news has resulted in double-digit losses for Swiss pension funds this year. She was hit hard by the simultaneous minus in equities and bonds.
Losses in equities and bonds eroded pension fund assets in the first half of the year.
The plan assets of the Swiss pension funds have lost double-digit values this year. This is shown by looking at the corresponding indices of banks and consulting firms. Private bank Pictet’s 2015 BVG index, which is highly regarded in the pension industry and which simulates a 25 percent equity share in pension funds, was down 10.4 percent this year as of July 8. In the case of the barometer, with an equity share of 40 percent, it is even almost 11 percent.
This reflects the simultaneous negative development of stocks and bonds. In earlier times, the performance of bonds often compensated for the losses of stocks: when the financial markets were stormed, fixed-income securities acted as a kind of safe haven. According to a study by the big bank UBS, the Swiss franc bonds in the pension fund portfolios lost almost 10 percent in value in the first half of the year, bonds in foreign currencies even 10.6 percent.
The minus for Swiss shares was even greater. With them, the pension funds ran a deficit of almost 17 percent in the first six months of the year, with equities worldwide a deficit of almost 16 percent. Only the third major asset class of pension funds, real estate, ensured some damage limitation: they were up 0.4 percent in the first half of the year.
The development can be explained on the one hand by a rarely poisonous news cocktail. The Ukraine war, concerns about a possible Russian gas freeze, drastically increased energy prices, fears of recession and disrupted supply chains as a result of the zero Covid strategy in China caused massive losses on the stock markets. Many stock exchanges have fallen by more than 20 percent since the beginning of the year. Added to this are the high inflation figures and interest rate hikes by the central banks, which weighed on bond prices and eliminated the diversification effect.