This was exactly what we focused our tactics and strategy on last year. So it’s not surprising that, just like then, our mandates with a “Switzerland” and “Global” focus are performing very well against the competition at the beginning of the year. The mandates with a “Responsible” focus are only performing slightly less well because they don’t contain gold, which is difficult to extract in an eco-friendly way.
At the same time, we expanded our range in mid-month to include two new focus areas. Investors looking to achieve a targeted impact with their investments and gear them towards the global net zero climate target can now choose a mandate with the “Sustainable” focus. And customers with a higher risk appetite have the opportunity to invest in megatrends and cryptocurrencies via the “Future” focus type.
In these mandate types, we’re also gearing ourselves tactically to the current situation – and this remains complex. Future economic performance in the USA is far from clear. On the one hand, private household incomes are growing more slowly and the labour market appears to have stalled. On the other, business sentiment has recently improved, which is a positive sign for the next few quarters.
That said, there is growing nervousness on the stock markets. This is more about who, besides the winners in artificial intelligence (AI), will be among the losers. Numerous company business models in a range of sectors are actually under threat. The result is falling prices as measured in Swiss francs. This again vindicates our cautious stance towards the US market. In recent months, solid companies, referred to as value stocks, have outperformed growth stocks on the equity market.
On top of all these developments, there’s also the nomination of Kevin Warsh as new chair of the US Federal Reserve. Warsh is considered an experienced, well-qualified economist who, like Donald Trump, wants to see lower interest rates. This would generally be good news for the market if lower interest rates weren’t associated with expectations of higher inflation.
Lower interest rates and higher inflation point to continued dollar weakness. This, in turn, reduces the US stock market’s good performance for our investors. It means we’re continuing to look for opportunities to generate returns elsewhere. As a rule, a weak dollar tends to drive the gold price to new highs, and it’s also conducive to emerging market investments. With this in mind, we’re continuing to actively manage our mandates without taking on excessive risks.
