Monthly Report June 2026

Market Performance in the First Half of 2026

The escalation of the conflict between the USA and Iran significantly shaped market developments in the first six months. The outbreak of war at the end of February led to a market correction in global stock markets in the following weeks due to sharply rising oil and gas prices. A temporary ceasefire and ongoing negotiations led to a recovery starting in April.

By mid-year, the main stock markets showed positive returns: The SPI gained 9.9%, the DAX 2.1% (in EUR), and the global equity index MSCI World 9.7% (in USD). The very strong performance in South Korea and Taiwan, driven by continuously increasing AI investments, led to a 24.0% (in USD) rise in the MSCI Emerging Markets index.

Higher energy prices led to an increase in inflation rates, temporarily higher yields on 10-year government bonds, and a 0.25% key interest rate hike by the European Central Bank (ECB). With the agreement on a framework deal to end the war in Iran and the opening of the Strait of Hormuz, oil prices in June fell back to pre-war levels of below USD 75. Overall, bond markets are trading approximately 1% lower, while the gold price, after a brief surge above USD 5,400, is currently at USD 4,000, approximately 7% below its level at the beginning of the year.

Tension Between Geopolitics and the AI Boom

The markets are currently navigating a complex interplay between a significantly tense geopolitical situation and continuously increasing investments in artificial intelligence (AI). Although oil prices are already trading significantly below the peak prices of over USD 120 reached in April, the situation in the Middle East remains tense with attacks on civilian ships in the Strait of Hormuz and renewed US bombardments of Iranian positions.

On the other hand, stock markets are supported by persistently high AI investments and strong corporate earnings growth. The progress in artificial intelligence is considerable and will lead to major transformations in various industries in the medium term. The accompanying investment boom is by no means limited to American technology companies but is broadly noticeable. A number of Swiss companies that we hold in the Format portfolios are also benefiting from this.

Fund and Mandate Performance

In the Swiss market, performance differences between the strongest and weakest stocks were enormous in the first half of the year, and price swings during shifts in sentiment were considerable. Swiss Equities, Mid and Small-Cap Equities, and Dividend Equities, as well as all mixed mandates, recorded positive performance (including distributions); however, as of the mid-year reporting date, they lagged their respective benchmarks. Swiss Equities Flex suffered negative performance due to a series of rapid, successive trend changes and sharp price movements. Global Bonds recorded a slight loss of -0.8%, but performed slightly better than the benchmark. The performance of the funds and mandates since the beginning of the year can be accessed via the following link.

The following individual stocks in our Swiss equity portfolios achieved a total return (including dividends) of more than 50% in the first half of the year: ams-OSRAM (122.3%), Inficon (87.1%), VAT (85.2%), Comet (82.1%), R&S Group (75.4%), Huber+Suhner (55.7%), and ABB (50.0%).

Outlook

In the coming weeks, market participants will want to see whether companies can meet or exceed earnings expectations for the first half of the year, and how companies assess their future outlook.

If energy prices sustainably stabilize at current levels, the positive impetus from AI investments should prevail and further support price development in the markets.

Best regards
Matthias Hug and Markus Lackner

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