The average Swiss balanced fund was up 1.9 per cent in the fourth quarter of last year, according to State Street-owned WM Performance Services. The WM universe consists of selected Swiss pension fund portfolios, which the company says is both representative and a reliable indicator of Swiss pension fund performance.
The median manager in the Swiss Balanced Universe returned 1.9 percent for the quarter, up from 0.1 percent in the previous quarter. This compares with benchmark returns of 2.1 percent for the WM Performance Services Swiss Balanced Benchmark (formerly InterSec Balanced Benchmark/IBB) and 2.2 percent for the Pictet BVG/LPP index. For the 2004 as a whole, the universe returned 3.6 percent, well under the Swiss Balanced Benchmark index return of 4.6 percent.
“On the whole, the past year saw a number of ups and downs, but in the end the annual returns can be considered satisfactory,” says Peter Leutenegger, Vice President of Marketing and Sales of WM Performance Services in Zurich. “However, the universe clearly missed its benchmark return target for the year, and Swiss equity managers will face a number of challenges to help position their clients well for 2005.”
Underperformance against the 2004 benchmark return was down to equity overweighting and selection. Swiss Equities were overweight relative to the WM benchmark by 2.4 percent, while International Equities were overweight by 3.1 percent. Both contributed negatively to relative pension fund performance, as did poor stock selection within the International Equities asset class.