Market Situation

Environment

The past year was marked by a complex macroeconomic environment, characterised by the gradual normalisation of monetary policy, a slight slowdown in global growth, inflation still above historical levels and significant geopolitical uncertainty. Major central banks remained vigilant regarding inflation risk, which is still present. However, most proceeded with interest rate cuts during the year to support economic activity and respond to signs of weakness in the sectors most sensitive to interest rates.

The US economy showed remarkable resilience, driven by a strong labour market and robust household consumption. However, monetary tightening began to take effect, resulting in a slowdown in private investment and a contraction in manufacturing activity. Although inflation was down from the previous years’ highs, it remained above the target tange, prompting the Federal Reserve to maintain a restrictive stance for much of the year.

In Europe, economic momentum proved more mixed. Germany suffered from a slowdown in its industrial sector and a decline in external demand, whilst southern European countries continued to benefit from a robust services sector, particularly tourism. Faced with the risk of recession hanging over several Member States, the ECB opted for a more accommodative monetary policy.

Switzerland weathered the storm better than many of its European peers, thanks to a tight labour market and a strong Swiss franc, which acted as a buffer against international tensions. However, the tariffs imposed by the US administration brought a wave of uncertainty to an economy that is heavily internationally oriented. Swiss inflation remained significantly lower than in other advanced economies, enabling the SNB to adjust its monetary policy more rapidly, while monitoring exchange rate developments closely.

On the geopolitical front, regional tensions, trade disputes and supply chain adjustments have created a climate of high uncertainty. These factors affected global economic confidence, dampened some investments and led to increased volatility across major asset classes.

Financial market developments

Equities

In 2025, geopolitical uncertainty and shifts in US trade policy caused periods of high volatility in equities, while favourable fiscal policies, monetary easing by certain central banks, generally solid corporate earnings overall and enthusiasm for artificial intelligence boosted appetite for risk. Supported by a resilient macroeconomic environment, developed markets posted double-digit gains, although performance varied by region. Overall performance remained concentrated in a few large-cap technology stocks, highlighting the fragility associated with high valuations. Artificial intelligence remains a key theme.

Bonds

The bond market benefited from monetary policy easing. In the spring, ten-year Treasury yields reached high levels, reflecting both inflationary fears and growing fiscal risk, before normalising. High-yield bonds posted strong performances, despite historically tight credit spreads. Meanwhile, high-quality corporate bonds also ended the year positively, supported by a more favourable interest rate environment.

Real estate

Real estate performance remained stable overall throughout the year. In Switzerland, real estate funds and equities continued the positive momentum that began in late 2023, with a particularly notable rise in real estate equities. In Europe, the recovery of the unlisted market is gaining momentum, driven by several consecutive quarters of rising valuations and a cautious return of liquidity. In Asia, valuations are also stabilising, with moderate gains. In the United States, performance remains mixed across segments: the residential market is benefiting from a favourable trend, whilst the office sector continues to struggle.

Currency

In the foreign exchange market, the Swiss franc has strengthened further as a safe-haven currency, recording sharp appreciation supported by significant flows into defensive assets against a backdrop of heightened volatility. Conversely, the US dollar has fallen significantly, reflecting investors’ repositioning towards safer currencies.

Gold

In 2025, gold once again fulfilled its role as a safe-haven asset against a backdrop of geopolitical uncertainty and trade tensions. This surge is largely fuelled by purchases from central banks, which continue to diversify their reserves with gold.