Swiss National Bank May Have to Sell Some of Its $100 Billion in U.S. Stocks

Swiss National Bank USA

The Swiss National Bank could be forced to sell a chunk of its more than $100 billion U.S. stock portfolio as part of a campaign to ban it from investing in defense companies.

A poll by gfs.bern for public broadcaster SRG on Friday showed 54% of voters in favor of the proposal, which goes to a national vote on Nov. 29.

Such an outcome would forbid the central bank or pension funds from providing financing for a company that derives more than 5% of revenue from arms sales.The SNB estimates it’d have to sell stakes in 300 companies, which together are worth 11% of the value of its portfolio of global stocks.

While few details on its individual holdings are available, its U.S. disclosure forms show it owned shares worth $369 million in Tomahawk cruise missile-producer Raytheon Co as of June, while its stake in Boeing Co., maker of the B-52 bomber, was worth $388 million.

The campaign is the latest assault on the independent central bank, which over the years has faced calls to pay out more money to the government, divest from fossil-fuel producers and even change the way it provides money to the economy.

While the SNB already excludes companies that make internationally condemned weapons like anti-personnel mines from its holdings, excluding ever-more companies could jeopardize the market-neutrality of its investments and complicate policy making.

Because the SNB’s investments, accrued from its foreign exchange interventions to weaken the franc, are designed to support its policy objectives, it seeks to mirror indexes and doesn’t engage in active stock picking.

Supporters of the initiative, proposed by anti-war activists, say it’ll help ensure public money isn’t used in a harmful way. The government, however, opposes the measure, saying it won’t do much to stop arms makers and will make life difficult for pension funds, already facing low returns.

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