Swiss pension funds are maintaining their gold investments as the asset class helps stabilize portfolios, hedge risks, and perform well during times of global uncertainty. With a looming global trade war and ongoing geopolitical tensions, gold continues to serve as a safe haven for Swiss pension schemes.
Typically, Swiss pension funds allocate between 3% and 5% of their total assets to gold, according to consultancy Complementa. However, recent data shows that the average gold allocation has remained around 1% in recent years. “Pension funds that are already invested in gold tend to keep their allocations. We have not seen a significant shift toward gold from funds that have not invested in it over the past two years,” said Andreas Rothacher, senior investment consultant at Complementa.
Gold as a Hedge and a Diversifier
Publica, one of Switzerland’s largest pension funds with CHF 42.5 billion in assets, invests around 3% of its portfolio in gold. Of this allocation, 80% is held in physical gold bars, while 20% is invested through excess return swaps. Stefan Beiner, Publica’s Chief Investment Officer, emphasized that the primary reasons for holding gold are diversification, risk hedging, and partial protection against inflation. “Gold has high sensitivity to inflation over the long term,” he explained.
Beiner also highlighted the liquidity benefits of gold, especially during extreme market conditions. “During the COVID-19 crisis in March 2020, when even U.S. government bonds were difficult to trade, gold remained liquid,” he said.
In 2024, Publica’s gold portfolio delivered a return of 33% in Swiss francs, contributing roughly one percentage point to its 5.9% net return for the year. The scheme’s gold investments continued to perform well in early 2025, with a return of nearly 8% in January.
Increasing Demand and Adjusted Allocations
Migros Pensionskasse, another major Swiss pension fund, conducted an asset/liability management (ALM) study in 2020, which showed that adding gold to its portfolio improved its overall risk-return profile. Initially targeting a 2% allocation to gold, the fund raised its target to 3% after rising inflation and strong gold performance proved the asset’s value. Migros Pensionskasse currently manages CHF 29 billion in assets.
Christoph Ryter, CEO of Migros Pensionskasse, noted that gold is in high demand globally, particularly after the freezing of Russian central bank assets following the war in Ukraine. “Central banks in emerging markets have increasingly diversified into gold, which contributed to a strong 36.9% return in Swiss francs for 2024,” Ryter added. The scheme’s gold investments also posted a solid 7.5% return in January 2025.
Other pension funds, such as PKBS (Pensionskasse of the City of Basel) and Compenswiss, also aim for a 3% allocation to gold.
Gold Reduces Reserve Requirements
A study conducted by the World Gold Council found that a 5% allocation to gold, funded by a mix of fixed income and equities, helps reduce Swiss pension funds’ reserve requirements for paying pension benefits. The allocation reduces the reserve requirement from 14.8% to 13.8%, while expected returns remain stable.
Risks and Economic Outlook
Despite ongoing optimism about the U.S. economy, driven by new policy reforms under the current administration, concerns remain over whether economic growth and corporate profits can meet investor expectations. Jeremy De Pessemier, asset allocation strategist at the World Gold Council, warned that extreme optimism is often unsustainable, noting that investors may need to consider whether asset prices are inflated.
While inflation has cooled in some regions, it remains above central bank targets in several areas. De Pessemier cautioned that if inflationary pressures resurface, it could impact central bank policies, including the pace of interest rate cuts or hikes over the coming year.
As global economic uncertainty persists, Swiss pension funds continue to emphasize gold’s role as a crucial portfolio stabilizer and risk mitigator.
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