Monthly Report December 2025

Market development in investment year 2025

The announcement of high new US import duties in April led to a significant fall in prices on international equity markets of around 20%. Thanks to numerous delays in deadlines, withdrawals and subsequent negotiation successes by key trading partners, the equity markets recovered from this shock by the middle of the year. In the second half of the year, the global economy and markets were increasingly driven by huge investments in areas of artificial intelligence (AI). In local currency, all major equity markets posted double-digit price gains. The SPI rose by 17.8%, the DAX in EUR by 23.0%, the S&P 500 by 17.9% and the world stock index MSCI World by 21.6% (both in USD). The US dollar lost almost 13% in value against the Swiss franc over the course of the year, which is why the returns in CHF in the S&P 500 and in the MSCI World shrink to a meager 3.0% and 6.3%, respectively.

Long-term interest rates on government bonds fell only in the USA and meant that bonds both in US dollars and after currency hedging in Swiss francs performed best. Thanks to ongoing uncertainties, the weak US dollar and falling real returns, gold rose by 64.6% in USD and by 43.9% in CHF.

Global economy defies higher US tariffs and is increasingly driven by AI investments

Although effective tariffs on imports to the USA rose from just over 2% to just under 11% in 2025, the global economy is likely to have grown by 3.2%, according to estimates by the International Monetary Fund. One of the main reasons for this was the adaptability of the private sector, which very quickly realigned its supply chains, used early exports to avoid announced tariffs or optimised the tariff burden by using different production sites. The good and stable financing conditions for companies and the significantly more stable monetary and fiscal policies of many emerging countries proved helpful. It was also important that, with the exception of China, there was no broad escalation in the trade conflict. The core rates (excluding energy and food) of consumer prices in the USA and the Eurozone are above the central banks' target values, but have so far reacted little to higher tariffs.

The huge investments in AI by major technology companies are increasingly becoming an important driver for the growth of the global economy. Individual market observers compare the current boom in artificial intelligence applications with the Internet bubble of the late 1990s. Because both phases were or are characterized by a high level of technological optimism, sometimes rapidly increasing company valuations and a widespread expectation that a new technology will transform entire industries. In our financial market report, we show why these comparisons fall short.

Fund and mandate performance 2025

The imposition of temporary US special tariffs of 39% on Swiss exports to the USA led to major uncertainty in the Swiss stock market at the end of July and to significant redeployments into defensive index heavyweights Nestlé, Roche and Novartis, which are significantly less heavily weighted in our portfolios. On the other hand, investors avoided many small and medium-sized portfolio companies, although the vast majority are not or only slightly affected by US tariffs and are doing well operationally.

Since more defensive and less growth-oriented business models in particular benefited from these redeployments, our growth-oriented funds Swiss equities and Swiss equities medium-sized and smaller companies lagged behind their benchmarks with a performance of 9.9% and 12.8%, respectively. Format Swiss equities Dividend stocks once again developed strongly in this environment and, with an increase of 22.4%, significantly exceeded the performance of the SPI. Based on current knowledge, the fund has achieved the best performance of all Swiss equity funds (more than 300 funds) over two and three years.

All mandates were also able to show positive performance. Thanks to the strong development of dividend stocks, Balanced Plus was the strongest performer with a performance of 8.1%. The results of all format funds and mandates for 2025 can be accessed via the link below.

outlook

The International Monetary Fund also forecasts global real economic growth of 3.1% for the new year. In addition to an expansive fiscal policy of important countries such as Germany, high investments in AI will contribute an increasingly larger share of economic growth. As the high AI expenses result in follow-up investments in a variety of other industries, growth will be more broadly based.

In this environment, equity investments remain attractive, while bonds offer advantages and are suitable as diversification, particularly in a scenario with lower growth rates. The unpredictability of the US administration remains a risk factor at various levels, which is why surprises and a certain degree of volatility can also be expected in the Trump administration's second year in office.

Best regards

Matthias Hug and Markus Lackner

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