Our positioning: Golden times

Many stock indices reached new highs, driven primarily by the tech sector and, most recently, by pharmaceuticals. The upturn in the pharma sector is likely due to two factors: first, the postponement of threatened pharma tariffs until 1  October 2025, and, second, the positive momentum sparked by the agreement between US pharmaceutical group Pfizer and the US government. Under this agreement, Pfizer committed to offering drugs at much lower prices within the Medicaid framework and making substantial investments in the USA. In return, the company’s imports will be exempt from tariffs for the next three years. This will likely have raised hopes on the markets of other pharma companies striking similar deals. The development has also recently benefited the Swiss stock market.

Tailwinds from the tech sector

Besides the pharma sector, tech was again the driving force behind rising share prices. This tailwind was created by a series of strategic collaborations and investments in companies benefiting from the AI boom. Chip manufacturer Broadcom and OpenAI recently announced the joint development of a chip for artificial intelligence specifically geared towards OpenAI. Although collaborations of this kind will generate significant capital flows in the industry, it remains to be seen to what the extent this will lead to sustained momentum for the market more broadly. The news gave the tech sector, and especially the tech-heavy US stock market, a considerable boost, but there are serious economic and political challenges, and this market’s downside risk is still considerable. We are staying cautious, keeping our underweight position in the US stock market and continue to favour global value stocks and emerging market equities.

Profit-taking on Chinese equities

The recent upturn in the tech sector also had an impact on the tech-heavy Asian stock markets. China’s stock market made particularly strong gains. Since mid-July when we overweighted the market, it has risen by around 13 percent, about twice as much as the US stock market in the same period. However, given the flare-up in trade tensions between the USA and China and the challenging ongoing economic situation in China itself, we’re now taking these profits and completely unwinding our overweight in Chinese equities.

Gold and real estate remain attractive

It’s striking that while stock markets are reaching new highs, gold is also breaking new records almost every day. The price per troy ounce recently moved above 4,100 dollars, equivalent to an annual return of more than 55 percent. This makes gold the strongest position in our portfolios at present. Aside from the upbeat mood on the stock markets, it also reflects growing scepticism among investors. This is understandable given the trade conflict with the USA and the domestic political challenges facing the United States such as its deep social divisions, high debt levels and the progressive erosion of its institutions. Historically, gold has proven to be a reliable stabilizer in portfolios, especially in difficult times. Against this backdrop and given the challenging global economic climate, we remain cautious and are maintaining our overweight in gold and US government bonds. We also still view Swiss real estate funds as more attractive than the Swiss money market, which now no longer offers any significant returns.

Performance of asset classes

Our positioning – Swiss focus