The numbers don’t lie, but they do require translation. When a Swiss investor posted a modest 12% gain in CHF for 2025, the response from the community was immediate: Are you me? The symmetry was uncanny, nearly identical portfolios, nearly identical returns, and nearly identical relief that they hadn’t needed to check Interactive Brokers (IBKR) every day. Yet beneath this surface calm lies a year that began with a tariff earthquake in April and ended with whispers of negative interest rates returning to Switzerland.
The Tariff Shock That Didn’t Stick
April’s announcement of new US tariffs caught everyone off guard, including the professionals. Sébastien Gyger, head of investment policy at BCV, admitted the policy’s ampleur surprised even seasoned economists. Swiss markets suffered through summer before Bern negotiated partial relief. Yet the damage was contained, at least for investors. While the real economy absorbed the blows, portfolios rebounded with remarkable speed.
The pattern repeated across Swiss investment accounts: VT (Vanguard Total World Stock ETF) dipped sharply in April, providing a buying opportunity for those who stayed liquid. One investor’s simple move, just bought some extra VT when tariffs crashed the market, became the trade of the year. That single, unglamorous decision likely accounted for most of their outperformance.
Currency: The Hidden Performance Driver
Here’s where Swiss investors face a unique psychological trap. That 12% CHF return translates to 22% in USD, nearly double. But which number matters? For someone paying Swiss taxes and planning retirement in Geneva or Zurich, the franc is reality. The forex conversion killed my gains, as one investor bluntly put it, reporting only 5% CHF returns despite 19% USD gains.
The CHF strength wasn’t accidental. Gyger notes the franc benefits from Switzerland’s stability, low inflation, and prudent public finances. André Kistler of Albin Kistler Vermögensverwaltung goes further: We expect a very strong, hard franc for the next two years due to inflation differentials with the US and Europe. For Swiss investors, this creates a permanent headwind on foreign assets, a feature, not a bug, of the system.
The Säule 3a Advantage
While IBKR accounts showed solid returns, Säule 3a (third pillar) portfolios often outperformed. One investor’s Finpension account delivered 9.14% through a simple UBS index fund allocation:
– 74% World ex-CH
– 19% Switzerland
– 6% Emerging Markets
– 1% Cash
The tax-free compounding creates a structural advantage that taxable accounts can’t match. Caroline Hilb Paraskevopoulos of Raiffeisen Schweiz points out that Swiss equities offer unique value: A dividend yield of three percent combined with currency stability makes domestic allocation more attractive than raw performance numbers suggest.
AI: Bubble or Just Beginning?
The expert roundtable hosted by NZZ revealed deep divisions. Birgitte Olsen of Bellevue Asset Management sees the MAGA tech giants, Meta, Amazon, Microsoft, Google, Apple, dominating with investments hitting 1.5% of US GDP. We are not at the end of the cycle, she argues, pointing to actual earnings growth unlike the 2002 dotcom bubble.
Peter Frech of Quantex disagrees. The capital intensity reminds him of the telecom boom, financed through special vehicles with massive debt. What is happening has characteristics of a bubble, he warns, noting that Chinese open-source AI models achieve similar results for millions instead of billions.
The consensus? Diversification. As André Kistler notes, Swiss investors were better served investing in Switzerland when currency-adjusted. The SMI’s relative cheapness, driven by undervalued pharma giants Roche and Novartis, provides a hedge against US tech concentration.
What Actually Worked in 2025
1. Doing Nothing
The most successful strategy was often inaction. Investors who set up automatic VT purchases in January and ignored the news outperformed those who tried to time the tariff response.
2. Swiss Home Bias
CHSPI (Swiss Performance Index) delivered 16.74% returns, beating global equities handily. The combination of currency stability, dividend yields, and defensive sectors proved valuable.
3. Opportunistic Liquidity
Those with cash reserves in April captured the discount. One investor’s modest crypto speculation, buying Zcash at $50 and selling between $300-600, funded more serious allocations.
4. Professional Pessimism
The experts’ defensive positioning proved premature. Frech admits they’ve been buying defensive quality values like consumer goods as others chase Nvidia. The contrarian play may pay off in 2026, but it cost returns in 2025.
The 2026 Outlook: Negative Rates Return?
Perhaps the most controversial prediction: Negative interest rates will return within 18 months. Kistler forecasts this with unsettling confidence, citing the SNB’s limited power against CHF strength. Hilb Paraskevopoulos calls it financial repression, using inflation and low rates to erode debt.
For Swiss investors, this changes the calculus. Cash positions become liabilities again. Gold hits new records as central banks diversify from dollars. Swiss real estate, already solid with limited supply, becomes even more attractive as bond yields turn negative.
The tariff question remains unresolved. Gyger believes they’re here to stay, generating $300 billion annually for the US Treasury. This permanent friction will keep currency markets volatile and Swiss exporters on edge.
Practical Takeaways for Swiss Portfolios
- Stop checking USD returns. Focus on CHF performance for Swiss financial planning.
- Maximize Säule 3a first. The tax advantage compounds faster than any trading edge.
- Swiss equities deserve more weight. The 3% dividend yield and currency stability matter more than raw growth.
- April 2025 was a lesson. Market shocks that feel permanent usually aren’t. Keep dry powder.
- Prepare for negative rates. If Kistler’s prediction holds, cash will cost you again. Plan accordingly.
The year 2025 taught Swiss investors that resilience beats brilliance. While the experts debated AI bubbles and trade wars, the quiet professionals who stuck to their VT and CHSPI allocations ended the year quietly satisfied. As one investor summarized: Could be better, could be worse. Let’s see what next year brings. In Swiss finance, that counts as optimism.
