Monthly Report November 2025

Market development in November 2025

Fears of overinvestment in AI and possible price exaggerations led to a brief setback on international equity markets within the month, starting from the USA. Thanks to a recovery towards the end of the month, many indices nevertheless closed with a plus. The broad Swiss SPI index benefited from the strong performance of heavyweights Nestlé, Novartis and Roche and rose by just under 4%, while the DAX fell by 0.5% in EUR. The American S&P 500 and the world stock index MSCI World were 0.3% higher in USD; the emerging market index MSCI Emerging Markets suffered a decline of 2.4% in USD due to negative price developments in China and South Korea.

Expectations for a next interest rate cut by the US Federal Reserve in December fell first, then rose significantly again with the publication of rather weaker economic data. Ten-year US interest rates fell to around 4%, which led to bond gains. The price of gold rose by 5.9% in USD due to higher uncertainty and lower interest rates.

Fear of an AI bubble only weighs on equity markets for a short time

Reports increased in the first half of the month warning of potential overinvestments in AI-related areas and inflated stock valuations. In fact, individual technology sub-sectors have skyrocketed in recent months and there is a high probability that not all AI investments will pay off. With Alphabet (Google), Amazon, Meta or Microsoft, the largest AI investors are highly profitable companies that can finance these investments to a large extent from current income. They cannot afford to stand aside from this pioneering technology and will continue to invest heavily in physical infrastructure, such as data centers, computer chips or power networks, in the coming years. Many different sectors of the economy benefit from these investments, as data centers must be built and cooled, and more electricity or semiconductors must be produced. The breadth of investments and the expected productivity gains that AI is expected to bring will make global growth more robust, which will support corporate earnings and thus equity markets in the medium term.

On November 12, 2025, the US House of Representatives approved the transitional financing bill passed by the Senate, thus ending the 43-day standstill of the US administration. The transitional budget is only valid until the end of January next year. If no agreement is reached on the regular budget by then, there is a risk of another “shutdown.” As a result of the budget lock, a lot of economic data has not been published in recent weeks or has only been published with a long delay. The calculation of consumer price inflation for the month of October was even completely omitted due to the complex collection of information. As a result, the state of the largest economy is currently more difficult to assess. Other data sources point to a further slowdown in the labor market, which increases the likelihood of a further key interest rate cut by the US Federal Reserve.

Fund and mandate performance

The Swiss stock market was pushed upwards by the strong performance of the three index heavyweights Nestlé (+3.8%), Novartis (+5.3%) and Roche (+18.7%). These three titles account for more than 80% of SPI's monthly performance of just under 4%. The index of medium-sized and smaller companies (SPI Extra) was only able to increase 0.7%. Since various portfolio companies have recently suffered price losses despite good operating performance, all format investments were below their benchmarks this month.

In the Conservative, Balanced Plus and Balanced International mandates, we used the interim correction in November to increase the equity ratio and reduce long-term US government bonds and the liquidity ratio. The results of all format funds and mandates since the beginning of the year can be accessed via the link below.

Outlook

Equity markets recovered quickly from the interim price setback in November. In the next few weeks, the focus will be on outstanding economic data and, in particular, on US inflation developments. Market participants are also looking forward to the US Federal Reserve's latest interest rate decision this year.

Best regards

Matthias Hug and Markus Lackner

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