At Zwitserleven you accrue pension by means of investing. Your pension payment is therefore dependent on the return on your pension capital. Via this message we inform you shortly about the market developments in 2021 and what the return has been on the funds over the year 2021.
Market developments in 2021
The continued recovery of the global economy was characteristic for the past year. Large-scale vaccination campaigns ensured that countries could open up further and further. Governments and central banks also provided support to limit the negative financial effects of the pandemic for consumers and businesses. As a result, there was a strong global demand for goods and raw materials, which consequently rose sharply in price. Growth and good corporate earnings meant that shares closed the year at record levels. Growth and inflation caused interest rates to rise in 2021. Finally, the euro depreciated against most other currencies.
Smart Investing
We make sure that your pension investments match your age and income. Are you relatively young, then you are automatically investing more in the Rendement fund which is targeted at reaching a high return. The returns are needed in order to accrue a sufficient pension. The closer you get to your retirement date, the more you invest in the Matching funds which have a defensive nature.
You use your invested money with us to buy a pension with an insurer of your choice when you retire. You hand over the pension capital to an insurance company and will receive a lifelong monthly pension for that.
Below you can find an overview of the achieved returns on our investment funds, both on the year 2021 as since the start of the investment funds (4 November 2014). The achieved fund returns will be compared to the returns of the fund benchmark, a measure of performance to compare and assess the returns of the our funds.
All shown investment returns are before deducting the yearly fund costs (OCF) and after deducting all transaction costs.
| 2021 fund return |
2021 return benchmark | Since start fund return (on a yearly basis) |
Since start return benchmark (on a yearly basis) |
|
|
Matching Kort fund |
6.7% | 5.8% | 3.8% | 3.5% |
| Matching Lang fund | 12.1% | 9.1% | 8.0% | 7.6% |
| Rendement fund | 20.7% | 20.6% | 9.7% | 9.3% |
Matching funds
You invest more and more in the Matching funds the closer you get to your retirement age. These investment funds mainly contain French and German government bonds.
The goal of these funds is to keep the risk of a setback as low as possible such that your expected pension will probably closely match the pension you can buy at an insurer. Setbacks may occur when interest rates decrease or prices increase (inflation) in the period before retirement. With lower interest rates the insurers demand more capital for the same pension payment. With increasing inflation you can buy less of the same pension as all becomes more expensive. Therefore, the benchmark of your Matching funds is linked to the tariffs of the insurers for converting your capital to a monthly payment with indexation based on inflation.
In 2021, interest rates increased. An increase in interest rates has a negative impact on the value of the bonds in the Matching funds. However, this negative impact of interest rates was more than offset by sharply rising inflation, which is positive for the value of Matching funds. To preserve the purchasing power of the pension you can buy, we invest fully in bonds that rise in value with inflation.
The effect of changes in interest and inflation is larger for bonds with a longer duration. As such, the return on the Matching Lang fund in 2021 was higher than for the Matching Kort fund.
The Matching Lang fund achieved a positive return of +12.1%. The Matching Kort fund achieved an investment return of +6.7%.
Compared to the benchmark funds, the performance of the Matching funds has been slightly better again this year. This picture, however, varies from year to year. This is mainly due to the fact that the interest rate on inflation-linked government bonds, in which the fund invests, does not always react equally to a change in the interest rate and inflation used for the insurers’ purchase rate (the benchmark) due to supply and demand in the market. Measured since inception, the performance of the Matching funds is now approximately +0.4% per year above the benchmark used.
Rendement fund
This fund invests in a group of different investment funds with a goal to reach a good return at reasonable risk. We do not invest itself but choose the best asset managers to invest your money in the Rendement fund.
The global economy continued to recover. Large-scale vaccination campaigns allowed countries to open up further and further. Continued support from governments and central banks ensured strong global demand for goods and commodities, which consequently rose sharply in price. Growth and good corporate earnings meant that shares closed the year at record levels.
These market developments also had a positive impact on the performance of the Rendement fund. The U.S. equity markets and real estate company shares in particular performed very well in 2021. The achieved fund return for 2021 came out at +20.7%.
Since its inception, the Rendement fund has achieved a higher return than its benchmark year on year. Also this year, the performance of the Rendement fund is better than that of the benchmark. On average, an additional return of 0.4% per year has now been achieved since the start.
Return on your pension capital
You can find your personal current annual return and your personal investment mix under My Investments on your participant portal. You can see a forecast of your expected pension benefit in your Dasboard.
More information and Self Investing
For more information on the investment funds and the returns of the Self Investing funds, visit the factsheets.