Investing in Switzerland: benefits, values, prospects

Nestlé, Novartis, Roche—the big names always lead the charge in reports on Swiss investments, but the Swiss investment landscape is far more diverse than a quick glance at the papers would have you believe.

Large Swiss global corporations are joined by traditional medium-sized companies and innovative disruptors. Swiss equities are complemented by Swiss corporate bonds. All these share a virtue with attractive properties for investors: their “Swissness”.

  

The benefits of Swiss investments

  

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Global footprint

Swiss companies are globally diverse. Switzerland’s economic output is primarily dependent on exports. Only a small percentage is generated on the domestic market.

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Strong currency

The Swiss franc is regarded as a “safe haven”. It has steadily increased in value over the past few decades.

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Outperformance

The Swiss stock market has performed outstandingly, compared to its counterparts around the globe, over the past 30 years. Dividends and share buybacks are attractive as a result.

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Innovation

An edge in terms of quality and innovation has enabled Swiss companies to fill key global market niches.

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Market leaders

Market leaders are often more profitable than the competition because of their pricing power; these include some Swiss family companies.

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Sustainability

In Switzerland, there is a long tradition of paying heed to doing business the sustainable way. This duty has been anchored in the Swiss Federal Constitution since 1999.

  

As a globally active investment house with Swiss roots, we know the Swiss corporate landscape like few others. Find out what sets us apart in this field.

 

Our expertise

 

  

  

Location, location, location: Switzerland’s advantage

There’s nothing that makes the benefits of Swiss investments stand out as much as crisis-ridden financial markets. Their stability, innovation and sustainability make them popular with investors as soon as uncertainty or volatility start to proliferate. But these attributes are no coincidence: they are the result of decades of political continuity, especially the strong and stable Swiss franc. These four attributes characterize Switzerland’s advantage as a business location:

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Political stability

Its direct democracy curbs blind actionism. This, coupled with a reliable legal system, lays the ideal groundwork for businesses.

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Pro-business stance

Moderate taxation, a flexible labor market and a highly educated, skilled workforce make Switzerland competitive on an international scale.

A Swiss flag icon symbolizes the Swiss franc as a strong and advantageous currency

 

 

 

Strong currency

As a strong currency and “safe haven”, the Swiss franc offers a lot of advantages. For instance, Switzerland has experienced far lower inflation than the EU.

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Low debt, low unemployment rate

Switzerland has comparatively low levels of sovereign debt and a very robust labor market—both key locational advantages, too.

 
 

Surprisingly, many Swiss companies have succeeded in dominating on the global market despite the strong Swiss franc— or is it precisely because of it?

The strong currency forces companies to set themselves apart early on with an edge in quality and innovation. If they master this step, they often acquire pricing clout that enables stable margins and long-term planning, even in times of crisis.

  

  • Five reasons the Swiss franc is so strong

    Diverse energy mix
    Switzerland’s limited dependency on fossil fuels makes its economy less vulnerable to fluctuations in raw material prices.

    Strict inflation mandate
    The Swiss National Bank’s comparatively low inflation tolerance is associated with stronger efforts to stem inflation and relative gains in purchasing power.

    Stronger growth
    Switzerland’s strong and continuous growth makes its market attractive to investors.

    Swiss “hedge”
    Since the financial market crisis in 2008, investors have increasingly been hedging against foreign currency risks and converting earnings from overseas into Swiss assets.

    Safe haven
    More than 100 years of political, economic and institutional stability underpin investors’ fundamental trust in Switzerland as a location.

  

  

 

Our experts are on hand to provide you with personal advice.

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Investing with a homefield advantage: investment solutions from Vontobel

As a globally active investment house with Swiss roots, we know the Swiss corporate landscape like few others. A claim we continually back up with numerous investment solutions and teams of experts specializing in Swiss assets.

Ein modernes Gebäude der Bank Vontobel in Zürich als ein globales Investmenthaus mit Schweizer Wurzeln

  • Primary “bottom-up” research: we talk to the companies directly and maintain close relationships with their management.
  • We publish our own analyses, maintain our own valuation models and factor ESG criteria into our ratings as a fundamental component.
  • In Swiss equities, we cover an average of ten equities per analyst, in contrast with the usual 50–100 equities per analyst.
  • Our recommendations and price targets are used by retail banks, including three of the top ten banks in Switzerland.
  • Our experts are regularly cited in the national and international press and consulted for their appraisal.

  

Historic stability: Vontobel

Founded in 1924, Vontobel is still majority-owned by its original founding family and their descendants. This makes it easier for us to remain independent and think long term.

We currently maintain locations in 13 countries worldwide, but our focus on Switzerland has remained firm. Even in today’s globalized economy, Vontobel offers domestic and international clients benefits and attractive investment opportunities.

Der alte Hauptsitz der Bank Vontobel, welche 1924 gegründet wurde

  • Sustained success
    Over the past 20 years, we’ve succeeded in gaining considerable trust on a global scale. As of the end of 2021, the assets managed by us totaled in excess of CHF 243 billion.
  • Proven stability
    Since our establishment almost 100 years ago, we’ve yet to post a single loss. Our shareholders have received a dividend every year to date.
  • Pure asset management
    Vontobel doesn’t have an investment bank. This helps us to avoid conflicts of interest during the research stage and to advise you to the best of our knowledge and conviction.

  

FAQ: frequently asked questions about Swiss investments

We answer the questions most frequently asked of our experts in connection with Swiss assets.

  • What makes Switzerland a “safe haven”?

    There are four success factors worth mentioning: Switzerland’s political stability, which is rooted in direct democracy. This in turn boosts the pro-business attitude of the Swiss population. All of this is supported by a reliable legal system and a well-developed education system.

    The result? A robust, diversified and innovative economy that makes for a strong Swiss franc. This helps overseas investors to protect their invested assets against value fluctuations—even in difficult times.

  • What makes Switzerland so competitive internationally?

    First, a country needs a good education system to produce highly trained employees and attract these from overseas. Not only is this a requisite for economic productivity, but it also facilitates high innovative capability.

    Likewise, a reliable legal system is also important, serving as the basis for a functioning economic and financial system. For instance, Switzerland ranks above all major European countries in the World Bank’s international rankings.

    All of these benefits combine to make Switzerland an attractive location that can attract strong firms and top professionals.

    This has seen the Swiss franc enjoy a standing as a “strong currency”—one which has appreciated against the euro since its introduction.

  • What Swiss assets do you recommend?

    Many Swiss companies have established themselves on the world market or are world leaders in certain sectors. As a result, Switzerland has one of the most diversified stock markets in the world. The market capitalization of companies ranges from small caps to mid caps to large caps.

    A wide range of asset classes is also available to interested investors: from equities and bonds to various funds and focused investment products.

    How Swiss investments can be utilized best comes down to the individual context. Here, factors like your desired investment horizon, return expectations, risk tolerance and your own individual financial situation should be considered as part of a professional investment strategy.

  

  

What else we can offer you: