How best to communicate with institutional investors - Switzerland

Half of Swiss institutional investors would like managers to be more honest and transparent in their communication

Key points:

• Good performance and competitive fees are the attributes of the asset managers that Swiss respondents are most likely to increase their exposure to. Other attributes mentioned include reputation, relationship, and efficiency as well as being perceived as reliable and innovative
• Due to the large number of respondents working for defined benefit pension schemes, longevity is the most important trend affecting the investment strategy for half of the institutional investors surveyed
• Unlike all other European countries surveyed, data providers are considered the most reliable source of information for Swiss institutional investors, especially for French-speaking respondents

Honesty and transparency are considered important elements of asset manager communication by all European institutional investors, but these elements are particularly valued in Switzerland, where almost half of institutional investors would like managers to improve in this regard, especially regarding the way (performance) data is presented on factsheets and reporting.

Good performance and competitive fees are the attributes of the asset managers that Swiss respondents are most likely to increase their exposure to, according to a survey by Fundamental Research. Other attributes mentioned such as reputation, relationship, and efficiency as well as being perceived as reliable and innovative suggest that Swiss institutional investors are not purely looking for quantitative factors but also want to establish a relationship with a trusted provider.

Longevity the most important trend

Between September 2019 and March 2020, Fundamental Research surveyed institutional investors in the Netherlands, the UK, Switzerland, the US, Germany and France about their views on global trends, asset manager communication, manager selection, their media consumption habits, and their top asset manager brands.In Switzerland, half of the respondents considered longevity the most important trend affecting the investment strategy. This is due to the large number of respondents working for pension funds. Other topics mentioned include the low-interest rate environment and the resulting lower returns on investment, which is in line with sentiments in the other European markets.

Low interest rates are seen as disruptive and as a major challenge for the Swiss pension fund industry. As in other markets surveyed, Swiss institutions face this challenge by changing their strategic asset allocation as well as greater portfolio diversification. Like their German peers, 22% of Swiss respondents are also increasing the risks taken to generate returns.

Other findings from our Swiss Institutional Investor Research include:

• Sustainable investing is the investment strategy that is most likely to grow in the next 12 months in Switzerland, similar to all other countries surveyed.
• Unlike all other European countries surveyed, data providers are considered the most reliable source of information for Swiss institutional investors, especially for French-speaking respondents. The reliance on data providers has also increased since 2015.
• Three out of four Swiss institutional investors use social media for professional purposes. The use of LinkedIn is very widespread while other social media (Xing, Twitter, Facebook) are only marginally used.
• Strategy/investment process, performance/track record, investment team, and fees are perceived as the most important factors in both stages of the manager selection process – discarding unsuitable managers in stage 1 and picking the winning manager in stage 2. While the importance of investment team and fees remains stable in both stages, performance/track record gains importance in stage 2 and overshadows strategy/investment process.

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