Migros Pensionskasse, the pension fund for the Swiss retailer, has recorded a performance of -6% at the end of October, with real estate being the only asset class to generate positive returns at 9.5%.

The allocation to real estate rose to 40.9% in October, from 34.8% at the end of last year. The pension fund also allocates 31.7% of its assets to nominal value investments, 25.4% in equities, and 2% in gold.

Assets under management stood at €27.53bn at the end of October.

Investments in real estate were the only “ray of hope” in an otherwise bleak year, with all three sub-categories – Swiss real estate, foreign real estate and infrastructure – benefitting from current positive returns and appreciation, it said.

The scheme’s overweight position in real estate and infrastructure investments compared with other Swiss pension funds led Migros to fend off negative returns this year, according to the Credit Suisse Pensionskassen Index on average at -10%, and at -9.5% according to the UBS Pensionskassen Index, it added.

Nominal value investments at Migros returned -11.1% at the end of October, equities -19.3% and gold -1.3%.

High inflation, central banks bumping up interest rates, and prospects of recessions in the US and in Europe have had an impact on the markets, with equities and nominal value investments recording losses, the pension fund said.

Last year, Migros Pensionskasse recorded returns above expectations of 8.5%, mainly as a consequence of strong equity markets and above-average results in real estate and infrastructure investments.

Equities returned 18.9% last year, real estate 9.4%, nominal value investments 0.2% and gold -1.3%.

The scheme’s funding ratio in October this year stood at 123.6%, down from 133.9% at the end of last year, but above 121.3% recorded in 2020.

The pension fund’s board of trustees has decided during its last meeting to pay a 3% interest rate on pensions assets next year, above the minimum of 1% set by the government, despite the negative performance so far this year, owing to a healthy financial situation and available funds, it said.

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Luigi is IPE's Berlin-based DACH correspondent. His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market. He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile

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