Switzerland’s largest pension investor made a net loss of 3.2% across the CHF37.6bn (€33bn) of total consolidated assets it managed for 20 pension plans last year, it announced yesterday.Without currency hedging, the result would have been 10bp higher (-3.1%), said Publica, which manages the retirement savings of federal employees.Publica runs money for 13 open pension plans and seven closed plans. The CHF34.3bn run for open pension plans lost an average 3.5% in 2018, while the seven closed plans’ invested assets lost an average 0.2%.The 0.2% loss for the closed pension plans was above the performance of the Pictet Swiss pension fund indices, while the result for the open pension plans was slightly below that of Pictet’s comparable indices, it said. The main reason for the negative performance in the open plans, Publica said, was its strategic decision to broadly diversify its portfolio and – among other things – to invest 16% in emerging market equities and bonds. Emerging market equities fell by 13%.The indices calculated by Pictet for Swiss pension fund portfolios have a small strategic allocation to emerging markets, so they were less affected by the downturn.Most major asset classes detracted from Publica’s overall performance last year, especially its equities allocation. Emerging markets weakened overall performance by just under 1.5%, while investment in industrialised countries weakened performance by roughly 2.1%.However, the strategic decision to invest in private infrastructure debt paid off, as these assets returned 2.1% in 2018, Publica said.The best performing asset classes were domestic and international real estate, which returned 6.7% and 4%, respectively. Together they added just under 0.5% to the portfolio.Publica’s annual average return was 2.9% over the period from 2000 to 2018, exceeding the average return of the fund’s benchmark by 20 basis points per year.The funding ratio for the open plans was estimated at around 100% as at the end of 2018, and at 107% for the closed plans.The results reported by Publica are unaudited, with exact figures due to be published alongside its 2018 annual report in the spring.The pension fund is rolling out a revised investment strategy that it decided on last year. This includes increasing its allocation to private markets, including real estate debt, and cutting its government and corporate bond allocations.