The investment policy for the compensation funds must, at all times, guarantee the solvency of the three social insurance schemes (AHV, IV, EO). The governing and executive bodies of compenswiss therefore defined as an objective the growth of the assets in real terms and a return in line with the market.

Management of the three funds

compenswiss manages the assets of the compensation funds jointly, while taking into account the specific characteristics of each fund. A risk budget is prepared for each social insurance scheme, taking into account the balance sheet and growth prospects, and is reviewed annually by the Board of Directors. It also determines the strategic asset allocation (SVA) and the detailed allocation by segment (DAA).

Investment portfolios

The assets are divided between two portfolios with different risk profiles and investment objectives. The purpose of the "base portfolio" is to ensure that liquidity is at all times sufficient. As such, it is composed of low-risk investments, particularly money market instruments. The "market portfolio" has a higher average return potential, estimated at 1.6% for 2021. It is subject to SVA, is more diversified than the base portfolio and includes longer-term investments such as equities and bonds.

In 2021, given the medium-term financial outlook for each of the three social security schemes, a liquidity reserve was created exclusively for the Disability Insurance (IV). Half of this reserve was used to finance the 2021 social insurance deficit by disinvesting the base portfolio on a monthly basis.

Strategic and tactical allocation of investments

In determining the strategic allocation, the Board of Directors relies on the estimated risk premiums and correlations of returns between asset classes. It sets minimum and maximum weightings for each of these categories and carries out an annual review by target weightings for the coming year.

The investment process by which the Board of Directors determines the annual allocation has been revised in 2021. The main objective was to achieve greater transparency. The changes also aim to increase efficiency by simplifying the investment process and to focus on a more passive approach compared to the current process.

Structure of the strategic allocation

Foreign currency bonds account for 43% of the allocations, making them the most important asset class. Equities account for 23%. They offer attractive returns in the long term, but are subject to higher short-term risks. Bonds and other fixed-income instruments denominated in CHF account for 21%, which is lower than the other two asset classes due to their low return potential. Real estate, which accounts for 11% of the allocations, is particularly interesting in terms of long-term growth. To further diversify the portfolio and protect against inflation, compenswiss also invests 2% in precious metals. Since 2019, this asset class known as "commodities", has been limited to gold.

Special hedging strategies are used to manage the risk factors of equities, exchange rates and interest rates.

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