All asset classes, with the exception of foreign real estate and, in some cases, foreign bonds performed positively in 2024. As a result, PUBLICA recorded positive returns in the 2024 financial year: the closed pension plan achieved a performance of 4.3%, the open pension plans 6%. The consolidated net investment return was 5.9%, on a currency-hedged basis, after all costs and taxes. Asset management costs stood at 0.3 of a percentage point. The consolidated net investment return was 0.4 percentage points above the benchmark return. The main reasons for the positive deviation from the strategy benchmark are tactical and selection decisions, which were pleasingly positive overall.
The closed plan contains only pension recipients, whereas the open plans contain both pension recipients and active members who are still working. This is why PUBLICA maintains a higher-risk strategic asset allocation for the open plans than for the closed plan. The allocation for the open pension plans generated a higher performance in 2024, mainly thanks to the higher equity component.
At the end of 2024, the consolidated funded ratio across all the pension plans stood at 104.6%. The consolidated funded ratio of the open pension plans was 104.3%. Of the open pension plans, none are now underfunded, as against three in the previous year. The funded ratio of the closed pension plan was 110.1%.
Equities and precious metals the main contributors to the result
Equities had the biggest positive impact on PUBLICA’s consolidated total assets in 2024. With a net annual return of 14.5%, they contributed 4.7 percentage points to the overall return of 5.9%. However, the differences between the regions and sectors are sharp. The best performers were equities in North America, up 24%, followed by Pacific at a little over 14%, and emerging markets with 13%. In Switzerland and Europe ex Switzerland, equities returned just under 7% and 10%, respectively.
For diversification reasons, PUBLICA invests a portion of its assets in precious metals such as gold and silver. Precious metals were the second-biggest influence on PUBLICA’s consolidated total assets in 2024, delivering a very good 33% return.
Bonds mixed, real estate Switzerland positive
With a total annual return of 1%, bonds made a slightly positive contribution of 0.4 percentage points to the overall return: Swiss bonds were the best performers, returning 5%, followed by government bonds emerging markets in local currencies at just over 2% and foreign corporate bonds at just under 1%. Government bonds emerging markets in USD were the lowest performers in the fixed income portfolio, recording just under -6%.
Real estate Switzerland once again generated a positive performance in 2024, with directly held Swiss real estate appreciating slightly and returning just under 5% at the end of the year. Owing to higher interest rates in many developed markets, foreign real estate funds lost ground again, as in 2023, especially at the start of the year. Overall, their return stood at -6.5%.
Equity allocation affects return
The level of the equity allocation had a crucial influence on the return in 2024, as a comparison with the Pictet LPP-25, LPP-40 and LPP-60 indices shows. The higher the equity allocation (60% in the case of the LPP-60 index, for example), the higher the return.
UBS’s Swiss pension fund index reports an annual return of 7.6%. PUBLICA’s 2024 return is lower than this, because PUBLICA holds a higher proportion of international real estate and foreign bonds.
PUBLICA will publish further details of its 2024 annual results and responsible investment in its Annual Report on 24 April 2025.
