Monthly Report September 2025

Market Development in the First Three Quarters of 2025

The major equity markets have so far defied negative headlines related to the trade conflict and geopolitical tensions and have delivered positive returns. In Europe, markets were supported by hopes for economic stimulus from Germany’s comprehensive infrastructure and defense spending paackage.

The Swiss Performance Index (SPI) rose 8.3% over the first nine months, while the DAX gained 20.0% in EUR. In the third quarter, both markets moved sideways, whereas global and US indices continued to rise. The MSCI World Index increased by 17.9% in USD and 3.2% in CHF, while the S&P 500 returned 14.8% in USD and 0.5% in CHF.

Emerging market equities benefited from a strong rebound in Chinese equities, gaining 28.2% in USD and 12.2% in CHF.

USD-denominated bonds received a boost in recent weeks due to falling interest rates and rose in value. Gold profited significantly from the high level of uncertainty, posting a +47.0% return in USD and +28.7% in CHF since the start of the year.

Trade Conflict and Artificial Intelligence as Dominant Themes

The trade conflict briefly put significant pressure on global equity prices following the so-called "Liberation Day" in early April. However, prices recovered quickly after the announcement of an initial 90-day tariff pause.

Since then, the Swiss equity market has moved sideways — unaffected even by the implementation of the very high 39% US tariff on most Swiss exports. This is mainly because many listed Swiss companies are not or only marginally affected by the tariffs. They are unaffected for one or more of the following reasons:
a) they do not export to the US,
b) they produce locally in the US for the US market,
c) they are able to pass on higher costs through pricing, or
d) they optimize tariff structures by shifting production to alternative locations.

The US stock market, on the other hand, continued to rise strongly over the past three months, fueled by the Artificial Intelligence (AI) trend. AI is viewed as a foundational platform technology — comparable to the internet or mobile computing (smartphones/laptops, etc.).

Key players in AI are investing heavily to maintain their technological leadership, positioning themselves to secure meaningful market share. AI is also expected to open up new revenue opportunities in cloud services, integrated software solutions such as Microsoft’s "Copilot", optimized advertising, and the sale of new hardware powered by AI.

Fund and Mandate Performance

The best absolute returns among the Format Vermögen strategies in the first nine months of this year were delivered by:

• Swiss Equity Dividend Yield (F) with +15.6%
• Swiss Mid & Small Cap Equity (F) with +10.2%

The Dividend Yield Portfolio continues its strong multi-year track record and is outperforming its benchmark by a notable 7.4% this year.

The year-to-date results of all Format funds and mandates can be accessed via the link below.

Outlook

Weaker labor market data led to the first rate cut by the US Federal Reserve in September — the first since December 2024. Additional rate cuts are expected by financial markets. The European Central Bank and the Swiss National Bank, however, have recently refrained from further rate cuts.

In the coming weeks, market participants are expected to focus on corporate earnings for Q3, before attention shifts again toward macroeconomic data.

Best regards
Matthias Hug and Markus Lackner

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