The insurance scheme for officials of the Zurich Canton has made quite dramatic changes to its investment strategy over the past 10 years, which have seen it develop into one of the most successful such schemes, and worthy national winner for Switzerland.
“We established a long-term strategy in 1991 with the stated aim of increasing our holdings in equities and bonds, and reducing the loans to employers, which stood at around 15%. We also made it an integral part of that strategy to diversify into foreign equities in the major world markets of Europe as well as the US and Japan,” says Daniel Gloor, head of asset management.
“We have made a point of sticking to the strategy, and unfolding it over the years. It is clear that we have not reacted to change seeking short-term advantages, but rather sat down each year to examine the state of the markets and develop our strategy accordingly,” he adds.
This has seen not only equity holdings rise, but also entry into alternative areas such as private equity. “So far we have not become involved in hedge funds, although that may be something for the future,” says Gloor. He advocates the virtues of keeping investment choice “straight and simple”.
“There are guidelines set down for us, and these dictate that we are quality-driven and so have passive equity holdings that are generally index-linked,” says Gloor. “Nevertheless the past 10 years have seen us move into foreign currency bonds, and develop a currency hedging programme for those bonds as well as invest in emerging markets through investment funds.”
He believes that within Switzerland the scheme operates one of the most efficient investment strategies. “We know this because we make comparisons with our peers,” he says. “Public funds are generally transparent in Switzerland, and we look at them to get a better idea of how they are operating; this is an important tool for us in our own development.
“With the private sector it is more difficult as their activities are a little more obscure.”
He believes the IPE awards help managers to improve on domestic comparisons. “They are prestigious awards which help to raise the profile of BVK but also establish us in a Europe-wide context. This is more impressive than if the comparison was solely with domestic peers. We are always interested in what funds in other countries are doing, especially in the light of our developing strategy.”

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