Monthly Report September 2026

Market performance in the first three quarters of 2026

Once again, we look back on an eventful 2026, shaped by the war in Iran and the AI boom. By the end of the third quarter, most equity markets were in positive territory, while major bond markets had recorded losses.

For once, the dispersion of equity market results for the first three quarters is exceptionally large: the Taiwanese stock market has a total return of 74.5%, while the Indonesian market is at -28.4% (both in CHF). Those equity markets with the best results generally benefited significantly from the strong performance of a small number of companies in the AI sector.

The conflict in Iran and the de facto blockade of the transport route through the Strait of Hormuz caused the oil price to rise temporarily to over USD 115 in the spring. A brief ceasefire led to a decline to the pre-war price level of around USD 70 by the middle of the year. In the last three months, the oil price has risen back above the USD 100 mark due to renewed escalation in Iran, continued blockades of shipping routes, and lower global reserves. Higher energy prices are driving inflation and have prompted both the European Central Bank (ECB) and the US Federal Reserve (FED) to raise key interest rates by 0.5% and 0.25%, respectively. As a result, indices for US government and corporate bonds hedged in CHF have come under significant pressure in recent months and are trading around 6% lower for the year.

Global economy defies higher oil prices

Although the average oil price this year is more than a quarter higher than the previous year's level, the global economy remains very robust with an expected real GDP growth of 3%. The oil intensity of the economy has fallen significantly over the last 20 years, partly due to higher energy efficiency and a structural shift towards more services and digital infrastructure. With the increasing market share of electric vehicles and alternative drive systems, dependence on gasoline and diesel is being further dampened. Moreover, thanks to renewable energy, oil now plays practically no role in electricity and heat generation in industrialized countries.

While the global economy was significantly burdened by oil prices above USD 100 just 10 or 20 years ago, it is better able to cope with such price levels today. Furthermore, a price of USD 100 in 2006 or 2016 corresponds to a much higher value in purchasing power terms than in 2026. Since nominal wages and global gross domestic product (GDP) have risen significantly since then, the share of household and corporate income spent on energy is now a smaller percentage.

Above all, however, the enormous investments driven by the AI boom are keeping global economic growth high. There is no sign of a trend reversal in this regard for the foreseeable future.

Fund and mandate performance

Shares of companies with a connection to AI are currently enjoying great attention and demand in the market, while shares without a connection to AI receive little attention, even when they show strong earnings improvements. Consequently, the operational performance of numerous companies without an AI connection is significantly better this year than their stock price performance. These shares have therefore become much cheaper and thus offer greater potential for the future. One example of this constellation is the pharmaceutical contract manufacturer Lonza, which is expected to increase its annual earnings by over 30% this year and by more than 15% in each of the two following years, despite a stagnant stock price for around 18 months.

The Format Aktien Schweiz Dividendentitel fund achieved a net performance of 63.4% in the years 2023-2025, almost double that of the SPI benchmark at 32.7%. The investment thus achieved a substantial cumulative outperformance of 30.7% over these three years and was named the best Swiss equity fund of this period by LSEG Lipper. This year, the investment is 9.6% below the benchmark. Our analysis following the half-year results has shown that the portfolio companies continue to enjoy very good business development and intact prospects, and that this year's stock performance of many titles is in all likelihood no more than a temporary setback that will be compensated for in the future.

The usual overview of the performance of the funds and mandates since the beginning of the year can be accessed via the link below.

Outlook

In the coming weeks, the focus will be on the upcoming Q3 company results as well as the further development of the Iran conflict and its impact on energy prices. Continued strong sales and earnings growth is expected both in Switzerland and in international markets, which should support the stock exchanges.

Best regards,
Matthias Hug and Markus Lackner

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