Swiss pension funds post loss in March
Swiss pension funds recorded an average performance of -2.63% in March 2026. Global equities and bonds fell sharply. This was due to escalating geopolitical tensions and rising energy prices, which weighed on the markets. This is shown in the current UBS overview of pension fund performance.
Sharp declines in March
Pension funds in Switzerland achieved an average performance of -2.63% in March after deduction of fees. The range for the individual pension funds ranged from -4.54% to -0.4%. The return since the beginning of the year is -0.76% and the annualized return since the launch of UBS Pension Fund Performance in 2006 is 3.24%.
Last month, the median performance of small pension funds with assets under management of less than 300 million Swiss francs was -2.76%, lower than the median performance of large pension funds with assets under management of over one billion Swiss francs at -2.56%. The Sharpe ratio for the last 36 months averaged 1.17, lower than the previous month's figure of 1.67.
Mixed performance of the asset classes
The average performance of the individual asset classes was mixed in March. Measured in Swiss francs, the asset classes performed as follows in descending order: Hedge funds at 3.79%, private equity at 3.13%, infrastructure investments at 1.52%, real estate direct at 0.09%, real estate indirect at -0.1%, foreign currency bonds at -0.18%, Swiss franc bonds at -1.17%, global equities at -3.99% and Swiss equities at -7.36%.
Geopolitical tensions weigh on markets
In March 2026, the global equity and bond markets experienced sharp declines. The MSCI AC World Index fell by 6.2 percent and the S&P 500 fell by 5.0 percent, both in US dollar terms. The major bond indices also retreated as investors reacted to escalating geopolitical tensions and rising energy prices. Fears of renewed inflation and the prospect of tighter monetary policy by central banks also weighed on the bond markets.
At times, investors anticipated up to three interest rate hikes by the European Central Bank and the Bank of England and even considered a possible tightening by the US Federal Reserve. This was despite the cautious tone of the central bank heads, who emphasized that they were monitoring the economic impact of the Middle East conflict, but did not signal that an interest rate tightening was imminent.
Recommendations for institutional investors
As the outlook for the Iran war remains highly uncertain despite the agreed ceasefire, the UBS Chief Investment Office emphasizes that it sees diversification and hedging as important strategies to manage short-term volatility while taking advantage of long-term opportunities. A prolonged conflict could lead to permanently higher energy costs, which could ultimately impact consumer confidence and economic growth. In this environment, the CIO recommends focusing on risk management, being selective in exposures to markets vulnerable to higher oil prices and diversifying beyond traditional asset classes.
