Format share update with and without US tariffs

After almost all companies listed on the Swiss Stock Exchange have communicated their annual results and the outlook for 2025, we have completed the review of the portfolio companies of Swiss equities, medium-sized and smaller Swiss equities and Swiss dividend stocks.

We have analysed the expected business performance of portfolio companies, on the one hand, excluding possible US tariffs and, on the other hand, with the impact of possible US tariffs.

Excluding possible US tariffs, we expect portfolio companies to have a positive business performance

The detailed analysis of the impact of potential US tariffs has shown that over 90% of our portfolio companies are not or only slightly affected by potential US tariffsbecause they belong to one of the following groups of companies:
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• Companies that do not do business in the USA

• Companies that also produce products for the USA in the USA

We also hold the shares of a few companies that are affected by customs duties, but potential tariffs have little or no influence on their business:
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• High pricing power: Companies that import products to the USA but whose latest products are better than those of the competition, so that customers will continue to order the products and pay the duties.

• “Equally long skewers”: Companies that import raw materials or products to the USA, but whose competitors also import the same raw materials or products to the USA. It is also possible that the import of the affected raw materials and products may be exempted from tariffs due to pressure from US companies.

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Numerous portfolio companies in the second group would therefore likely benefit from tariffs, and only a few portfolio companies would have a certain negative effect of tariffs on business development. We only hold these few companies, and generally with reduced weight, because we assume that business development can largely compensate for the impact of potential tariffs without considering possible tariffs.

In addition to the direct impact of possible tariffs, there are currently further indirect consequences from. This includes in particular the sharp depreciation of the USD and the consequences of the uncertainty caused by the trade conflict. The sharp depreciation of the USD affects all foreign companies doing business in the USA and will - as always when foreign currencies lose value - have a negative impact on the results of these companies. Caused by the trade conflict Uncertainty among companies and consumers This is likely to result in some investment and consumption being postponed, resulting in lower economic growth. In other words, the direct consequences of tariffs will hit the American economy and its companies the hardest through inflation, slowing growth and margin pressure; however, the indirect consequences are also likely to have negative effects on other economies and their companies.

After considering all aspects, we conclude that The format equity portfolios are reasonably set up even in the event of significant tariffs are. However, the price development of the last two weeks does not reflect this in any way, particularly with regard to potential winners of tariffs. In the last two weeks, shares have often been sold completely undifferentiated. This is likely to change in the near future. We therefore assume that current portfolios should exceed their benchmarks over the next few months.