Investment concept

Rentenfabrik invests the assets in accordance with the concept of “liquidity matching”. This method has been especially developed for an open foundation of pensioners and takes account of their risks and opportunities. It is based on the payouts, which for a pure foundation of pensioners without partial liquidations such as Rentenfabrik can be very well predicted. The assets are split across three different ‘pots’ with contents determined by the investment strategy and volumes determined by the expected payouts. A joint investment strategy is deployed for all members.

Bracket 1 (security cushion)

The core focus of a foundation of pensioners is security, i.e. the pensions must under all circumstances be paid out. A very large amount of liquidity is therefore kept available at Rentenfabrik in order also to prevent any losses arising from unplanned sales of volatile assets. This security cushion comprises the cumulative pension payments for the next five years.

Bracket 2 (high liquidity and return)

All pension payments from the sixth up to and including the eleventh year are invested in listed real estate and hedged Swiss equities. The expected fluctuations of stocks are limited and the investments are liquid. While the security cushion today yields a negative or at most zero return, this bracket can be expected to generate a return.

Bracket 3 (long-term return)

All payments from the twelfth year can be invested in both Swiss equities and real estate foundations and should therefore facilitate a return at medium volatility. Dividends and distributions from the real estate (brackets 2 and 3) fill up the security cushion (bracket 1). In addition, the split across the three brackets is adjusted each year, as changes arise from the ageing process, mortality and new entries of pension funds.