Our positioning: Taking advantage of opportunities, while keeping an eye on risks

After the exciting developments of recent weeks, we are adopting more balanced positioning in our portfolios. We aim to take advantage of investment opportunities, while keeping an eye on risks.

Coronavirus is still dominating public life and parts of our economy. The second wave is now hitting us with full force. But there’s hope: two companies have already announced major progress on the development of a coronavirus vaccine. Mass vaccination is still some way off, but these developments mean that an end to economic restrictions is in sight. There is urgent need for this in the economy. After a rapid recovery over the summer, the economy is faltering. The return to working from home, the cancellation of Christmas celebrations and fears over unemployment are holding back consumer appetite and investment activities.

Yesterday’s losers now gaining ground

News of progress on the vaccines spurred the financial markets on in November. The markets had clearly not anticipated the emergence of a vaccine so soon. Financial investments, which had been severely hit by the pandemic, primarily benefited from this. There was a great sense of relief, particularly on the European stock exchanges. The Swiss equity market, dominated by pharmaceuticals, fell behind. The technology giants, such as Apple, Microsoft and Amazon, which performed strongly during the months of coronavirus, are currently also less in demand amongst investors.

Regionally, we are again focusing more heavily on East Asia.

Neutral positioning of the portfolios

We also regard the latest developments as positive. The lean spell for companies due to the second wave looks set to be temporary and will also be cushioned by continued expansive economic policy. Ultimately, that’s precisely what counts on the financial markets: it’s widely known that what drives prices up is not the current situation, but the expectations of what lies ahead.

In light of these positive developments, we are returning the positioning of our portfolios to neutral after a lengthy period of caution. With good diversification, the portfolios can benefit from the anticipated recovery, but will not be wrong-footed by any setbacks. On one hand, we are increasing our allocation of equity investments, and, on the other, realizing gains from the high gold position that has been maintained since the start of the year. With a yield of 20 percent, this position has performed well for our portfolios this year.

Chinese consumers are back – and we’re benefiting

Regionally, we are again focusing more heavily on East Asia. In addition to the purchase of Japanese and Chinese equities, we are also increasing our allocation of equities from emerging markets. In the investment instruments of emerging market equities that we have selected, East Asian securities are again heavily over-represented. As well as the anticipated recovery in global trade, we also hope to benefit from an upturn in regional consumption. In China, consumers have returned after a lengthy period of restraint. There appears to be great pent-up demand. On this year’s “Singles Day”, the world’s biggest shopping event that takes place on Chinese online retail sites on 11 November, all records were smashed once again. Our overweighted position in East Asian securities reflects this focus on big markets and new technologies.

Performance of asset classes

Currencies1 month in CHFYTD in CHF1 month in LCYTD in LC
Currencies
EUR
1 month in CHF
0.6%
YTD Year-to-date: since the start of the year in CHF

–0.5%

1 month in LC Local currency
0.6%
YTD Year-to-date: since the start of the year in LC Local currency
–0.5%
Currencies
USD
1 month in CHF
0.6%
YTD Year-to-date: since the start of the year in CHF
–5.4%
1 month in LC Local currency
0.6%
YTD Year-to-date: since the start of the year in LC Local currency
–5.4%
Currencies
JPY
1 month in CHF
0.8%
YTD Year-to-date: since the start of the year in CHF
–2.3%
1 month in LC Local currency
0.8%
YTD Year-to-date: since the start of the year in LC Local currency
–2.3%

Equities1 month in CHFYTD in CHF
1 month in LCYTD in LC
Equities
Switzerland
1 month in CHF
0.5%
YTD Year-to-date: since the start of the year in CHF
1.4%
1 month in LC Local currency

0.5%

YTD Year-to-date: since the start of the year in LC Local currency
1.4%
Equities
World
1 month in CHF
2.0%
YTD Year-to-date: since the start of the year in CHF
2.2%
1 month in LC Local currency
1.4%
YTD Year-to-date: since the start of the year in LC Local currency
8.0%
Equities
USA
1 month in CHF
0.7%
YTD Year-to-date: since the start of the year in CHF
6.5%
1 month in LC Local currency
0.1%
YTD Year-to-date: since the start of the year in LC Local currency
12.5%
Equities
Eurozone
1 month in CHF
4.4%
YTD Year-to-date: since the start of the year in CHF
–5.8%
1 month in LC Local currency
3.8%
YTD Year-to-date: since the start of the year in LC Local currency
–5.4%
Equities
United Kingdom
1 month in CHF
7.4%
YTD Year-to-date: since the start of the year in CHF
–20.3%
1 month in LC Local currency
6.3%
YTD Year-to-date: since the start of the year in LC Local currency
–14.8%
Equities
Japan
1 month in CHF
6.6%
YTD Year-to-date: since the start of the year in CHF
0.8%
1 month in LC Local currency
5.8%
YTD Year-to-date: since the start of the year in LC Local currency
3.2%
Equities
Emerging markets
1 month in CHF
4.6%
YTD Year-to-date: since the start of the year in CHF
2.3%
1 month in LC Local currency
4.0%
YTD Year-to-date: since the start of the year in LC Local currency
8.1%

Fixed income1 month in CHFYTD in CHF
1 month in LCYTD in LC
Fixed income
Switzerland
1 month in CHF
–0.3%
YTD Year-to-date: since the start of the year in CHF
0.1%
1 month in LC Local currency

–0.3%

YTD Year-to-date: since the start of the year in LC Local currency
0.1%
Fixed income
World
1 month in CHF
0.9%
YTD Year-to-date: since the start of the year in CHF
0.8%
1 month in LC Local currency
0.3%
YTD Year-to-date: since the start of the year in LC Local currency
6.5%
Fixed income
Emerging markets
1 month in CHF
2.5%
YTD Year-to-date: since the start of the year in CHF
–2.3%
1 month in LC Local currency
1.8%
YTD Year-to-date: since the start of the year in LC Local currency
3.2%

Alternative investments1 month in CHFYTD in CHF
1 month in LCYTD in LC
Alternative investments
Swiss real estate
1 month in CHF
0.6%
YTD Year-to-date: since the start of the year in CHF
2.4%
1 month in LC Local currency

0.6%

YTD Year-to-date: since the start of the year in LC Local currency
2.4%
Alternative investments
Gold
1 month in CHF
–2.0%
YTD Year-to-date: since the start of the year in CHF
17.1%
1 month in LC Local currency
–2.6%
YTD Year-to-date: since the start of the year in LC Local currency
23.8%

Our positioning – Swiss focus

LiquidityTAA oldTAA new
Liquidity
CHF
TAA old Tactical asset allocation: short- to medium-term positioning
1.0%
TAA new Tactical asset allocation: short- to medium-term positioning
1.0%
Liquidity
JPY
TAA old Tactical asset allocation: short- to medium-term positioning
2.0%
TAA new Tactical asset allocation: short- to medium-term positioning
2.0%
Liquidity
Total
TAA old Tactical asset allocation: short- to medium-term positioning
3.0%
TAA new Tactical asset allocation: short- to medium-term positioning
3.0%

Equities
TAA oldTAA new
Equities
Switzerland
TAA old Tactical asset allocation: short- to medium-term positioning
28.0%
TAA new Tactical asset allocation: short- to medium-term positioning
26.0%
Equities
USA
TAA old Tactical asset allocation: short- to medium-term positioning
8.0%
TAA new Tactical asset allocation: short- to medium-term positioning
8.0%
Equities
Eurozone
TAA old Tactical asset allocation: short- to medium-term positioning
5.0%
TAA new Tactical asset allocation: short- to medium-term positioning
5.0%
Equities
United Kingdom
TAA old Tactical asset allocation: short- to medium-term positioning
0.0%
TAA new Tactical asset allocation: short- to medium-term positioning
0.0%
Equities
Japan
TAA old Tactical asset allocation: short- to medium-term positioning
0.0%
TAA new Tactical asset allocation: short- to medium-term positioning
2.0%
Equities
Emerging markets
TAA old Tactical asset allocation: short- to medium-term positioning
4.0%
TAA new Tactical asset allocation: short- to medium-term positioning
5.0%
Equities
China
TAA old Tactical asset allocation: short- to medium-term positioning
1.0%
TAA new Tactical asset allocation: short- to medium-term positioning
2.0%
Equities
Total
TAA old Tactical asset allocation: short- to medium-term positioning
46.0%
TAA new Tactical asset allocation: short- to medium-term positioning
48.0%

Fixed incomeTAA oldTAA new
Fixed income
Switzerland
TAA old Tactical asset allocation: short- to medium-term positioning
19.0%
TAA new Tactical asset allocation: short- to medium-term positioning
19.0%
Fixed income
World
TAA old Tactical asset allocation: short- to medium-term positioning
10.0%
TAA new Tactical asset allocation: short- to medium-term positioning
10.0%
Fixed income
Emerging markets
TAA old Tactical asset allocation: short- to medium-term positioning
6.0%
TAA new Tactical asset allocation: short- to medium-term positioning
6.0%
Fixed income
Inflation-protected bonds
TAA old Tactical asset allocation: short- to medium-term positioning
2.0%
TAA new Tactical asset allocation: short- to medium-term positioning
2.0%
Fixed income
Total
TAA old Tactical asset allocation: short- to medium-term positioning
37.0%
TAA new Tactical asset allocation: short- to medium-term positioning
37.0%

Alternative investmentsTAA oldTAA new
Alternative investments
Swiss real estate
TAA old Tactical asset allocation: short- to medium-term positioning
7.0%
TAA new Tactical asset allocation: short- to medium-term positioning
7.0%
Alternative investments
Gold
TAA old Tactical asset allocation: short- to medium-term positioning
7.0%
TAA new Tactical asset allocation: short- to medium-term positioning
5.0%
Alternative investments
Total
TAA old Tactical asset allocation: short- to medium-term positioning
14.0%
TAA new Tactical asset allocation: short- to medium-term positioning
12.0%
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