Migros Pensionskasse (MPK), the CHF27bn pension fund for the Swiss retailer, has recorded so far this year returns below its benchmark. It has returned 0.0% as of the end of October, against a 0.4% benchmark, according to the scheme’s publication Vorsorge-flash.

Nominal value investments, making up total assets of CHF8.79bn, returned -0.7% so far this year, against a -0.1% benchmark, it added.

Equity investments, totalling CHF7.08bn, returned 1.2% as of the end of October, above its 0.8% benchmark, and gold, totalling CHF602m, returned 7.9% this year, compared with a 8.3% benchmark, it added.

Equities were very volatile, but improved significantly in the first half of the year, with tech stocks in particular benefitting from the hype surrounding artificial intelligence, it said, adding that the asset class lost gains due to interest rate expectations.

With real estate making up the largest share of assets in its investment portfolio – CHF 10.81bn – Migros returned 7.9% as of the end of October, below the 8.3% benchmark.

The scheme’s foreign real estate portfolio was hit by devaluations, giving up part of the gain made last year, it said. The Swiss real estate portfolio also experienced corrections but, thanks to income from rents, the result remains positive so far this year.

MPK expects its real estate portfolio to experience headwinds as a result of rising interest rates, and despite low vacancies, it said.

The scheme’s strategy is tilted towards real assets, with investments in real estate amounting to 39.6% of total assets, a share considerably higher than the average pension fund, while the share of equities is lower compared with other schemes, at 26%.

MPK’s returns at the end of October were lower than those recorded by the Credit Suisse and UBS Pensionskassen indices (1.1%), but over a period of three, five and 10 years, returns were higher that those recorded by the indices, precisely because of the higher share of assets allocated to real assets, it said.

The pension fund lost 0.35% of assets as a result of the decision taken by the financial market supervisory authority FINMA to write down Credit Suisse’s AT1 bonds, 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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