The introduction of negative interest rates and the lifting of the minimum euro exchange rate have once again intensified the investment crisis affecting autonomous and semi-autonomous pension funds. Generating sustainable income over the long term represents a major challenge, further heightening the need for alternative investment opportunities.
«Smart beta» solutions offer just such an opportunity for diversification, weighting indices on the basis of criteria other than market capitalisation. The strategy of the two investment groups is aimed at outperforming the SPI by minimising the latter’s size bias and procyclical tendency with the aid of alternative weighting procedures and dynamic steering of investments in risk/return-optimised index funds. This approach offers the advantages of traditional index-tracking while at the same time tapping into sources of outperformance (also known as «beta») in a targeted manner and thus exceeding the SPI’s return over the long term. Investors can choose from two investment groups designed to suit different risk preferences. While Swiss Shares Smart Beta Dynamic 100 invests its entire portfolio in index funds with optimised risk/return profiles, Swiss Shares Smart Beta Dynamic 50 places half of its assets in the 1741 Switzerland Cap Weighted Index Fund. This leads to a lower tracking error relative to the SPI.
Dr Dunja Schwander, Managing Director of the Helvetia Investment Foundation, explains: «Our innovative investment groups Swiss Shares Smart Beta Dynamic 50 and 100 combine the advantages of passive index funds with the dynamism and flexibility of active investment management. Thanks to the underlying index funds with optimised risk/return profiles, they offer a welcome diversification in the Swiss Shares segment, and thus an attractive addition to any pension fund portfolio.»
The Helvetia Investment Foundation has developed these innovative investment groups in close cooperation with its business partners, Notenstein Private Bank Ltd and 1741 Asset Management Ltd. 1741 Asset Management Ltd is one of the leading quantitative asset managers in Switzerland and winner of the William F. Sharpe Award. Notenstein Private Bank AG, a subsidiary of Raiffeisen Switzerland, specialises in wealth and asset management for private and institutional investors with sustainable investment solutions. The Helvetia Investment Foundation specialises in the management of indexed securities and real estate investment groups for autonomous and semi-autonomous pension funds.
Additional information on the Helvetia Investment Foundation and the investment groups Swiss Shares Smart Beta Dynamic 50 and 100 can be found on the Internet at