The Swiss benchmark Swiss Performance Index has risen 0.85% since the beginning of the year, after making gains of 0.95% in the previous year.
Lately, concerns about worsening geopolitical tensions, corporate earnings volatility, and uncertainty over when the Federal Reserve will cut interest rates have led some investors to seek safe haven assets in which to invest their capital.
One European index particularly stands out in the eyes of the portfolio manager of the Vontobel asset manager, Carla Bänziger, even in a falling market, thanks to its particularly attractive valuations, and that is Switzerland.
“It is recommended to invest in the Swiss market during uncertain times, such as when a recession is expected. For retail investors, I think it makes sense to always have a portion of their investments in Swiss stocks to balance out any volatility in the market,” Bänziger said.
The Swiss benchmark index Swiss Performance Index has risen 0.85% since the beginning of the year, after making gains of 0.95% in the previous year.
In contrast, the benchmark S&P 500 index is up 4% year to date, following a 24% rise in 2023.
Carla Bänziger manages around 890 million Swiss francs ($1.02 billion) in Swiss stocks.
According to her, Swiss stocks benefit from the strong Swiss franc and a political system that favors innovation in companies.
Bänziger’s optimism about Switzerland persists even though its economy is expected to grow "well below average" at 1.1% this year, due to economic risks such as the slowdown in Germany and China and higher interest rates dampening demand for Swiss products, according to the State Secretariat for Economic Affairs.
Actions to consider
However, Bänziger is bullish on the stock market, naming reinsurance company Swiss Re and real estate companies Swiss Prime Site and PSP Swiss Property as his top three picks.
Regarding Swiss Re, the portfolio manager noted that the company has “good business momentum”.
Swiss Re shares are listed on the SIX Swiss Exchange and represent 1.8% of the iShares MSCI Europe Financials ETF.
Meanwhile, Bänziger believes that Swiss Prime Site and PSP Swiss Property are good investments among small and medium-sized businesses, considering the opportunities in the Swiss real estate sector.
With housing markets being “negatively correlated to interest rates,” he believes both stocks have the potential to gain as economists predict one – perhaps two – rate cuts this year.
Swiss Prime Site and PSP Swiss Property are included in the SPDR Dow Jones International Real Estate ETF, occupying 2% and 1.5% respectively.
Other stocks on Bänziger’s radar include chocolate and confectionery company Chocoladefabriken Lindt & Sprüngli, engineering company ABB and toilet company Geberit.
Original article published on Money.it Italy 2024-02-19 07:15:00. Original title: 6 azioni ad alto potenziale per investire in Svizzera
