Solid global economy, complex market environment

The global economy is continuing to prove robust, although there are initial signs of a slowdown in the US. While Europe is benefiting from government investments, new US tariffs are increasingly hitting the economy. In the emerging markets, China, in particular, continues to provide a stabilising influence. Against the backdrop of an environment characterised by falling interest rates, solid corporate earnings and sustained interest in real assets, investors are advised to focus on selective investment choices and active risk management.

Overall, global economic growth is encouraging. However, weaker growth in employment creation means there are signs of an economic slowdown on the other side of the Atlantic. Despite this, the new fiscal legislation is expected to lend support to the US economy. The Eurozone economy is benefiting from military spending plans and infrastructure investments, particularly in Germany. However, higher US tariffs will now weigh on the economic situation in Europe, including in Switzerland, more so than has been the case during the course of the year so far. The emerging market economies have proven to be stable during 2025, with support chiefly coming from government subsidies in China. Nevertheless, the recent US tariff hikes mean that these economies will also be put to the test over the quarters ahead.

Currencies

For a number of months now, the euro has been moving sideways against the Swiss franc. The euro is gaining support underpinned by the consensus expectation that economic growth will improve as a result of military and infrastructure investments. By contrast, France’s ongoing political problems in forming a government and managing its debt problem represent a less positive factor for the euro. The US dollar has suffered a loss of confidence this year due to the erratic and unexpected economic policy decisions taken by the Trump administration. Future currency movements will be very much dependent on whether the market’s expectation of more marked interest rates cuts from the US Federal Reserve than the European Central Bank come to pass.

Bonds

Yields on the global bond markets have fallen once more. During the past month, the US Federal Reserve reduced its key interest rate by 25 basis points. Meanwhile, investors are anticipating further interest rate cuts in the US. The European Central Bank confirmed its key interest rate of 2%, while concerns are persisting about the government crisis and high levels of debt in France. In the meantime, the Swiss National Bank has left key interest rates at zero and communicated its intention to avoid negative interest rates in principle. Corporate bond risk premiums (spreads) remain at the lower end of their historical range and have narrowed further compared to the previous month. Due to lower capital market interest rates and the limited potential for price gains, we remain underweight in bonds. We continue to maintain a slightly longer duration relative to the benchmark, as we anticipate further interest rate cuts over the medium to long term.

TAA Balanced CHF

Real estate

Following the highs of the previous month, the Swiss real estate fund index (SWIIT) underwent a correction. Nevertheless, demand for real estate funds remains elevated. Fundamental drivers continue to include economic growth, immigration and low levels of building activity. High issuance activity continued and was well absorbed by the market. A new record has already been set in 2025 with capital increases for listed funds totalling almost CHF 2.1 billion. A further roughly CHF 700 million has either been announced or is already in progress. With a distribution yield of around 2%, Swiss real estate funds remain attractive relative to bond yields and expected average inflation. We are therefore leaving the overweight position unchanged.

Equities

While global equity markets posted slight gains during the reporting month, they were subject to volatility. Price fluctuations were caused by geopolitical tensions as well as concerns about the credit quality of certain US regional banks. The initial earnings reports to come out of the US banking sector were better than expected and were supported by stable net interest margins and solid trading income. However, upside potential in the short term is limited by high valuations. Although equities in quality companies have recently performed in line with the overall market, they have lagged behind during the year to date owing to the lower weighting of banks and the absence of high-performing tech stocks. Value stocks recorded gains viewed over the month thanks to individual securities that posted very strong performances. The Swiss equity market remains a defensive anchor and source of stability. Swiss small- and mid-caps continue to offer potential but require close monitoring.

Commodities

Precious metals have recently performed significantly better than the overall commodities market, rising 18% on a month-on-month basis. Gold hit new highs, while silver performed even better. Industrial metals, and copper in particular, also performed positively. The overall commodities index, however, remained largely stable. By contrast, the agricultural sector declined slightly by -2.5%. Energy was the weakest performing sector: since mid-September, the oil price has fallen by approximately 8% due to growing supply from increased production and only moderately rising demand. The allocation to gold and commodities remains unchanged. As part of a rebalancing measure, the gold allocation is to be returned to its tactical target weight after rising due to strong performance.

Private markets

Private market investments offer long-term investors attractive investment opportunities. Private equity provides access to high-growth, unlisted companies and creates sustainable added value through active management and operational improvements. Private debt offers stable, predictable returns and a solid risk-return profile. Focus here is primarily placed on senior secured loans with a lower level of default risk due to diversification across regions and sectors. Both private equity and private debt combine stability and return potential, reduce dependence on market fluctuations and boost the resilience of a diversified portfolio.

Digital assets

After digital assets closed the seasonally weak month of September with an unusually solid performance for this time of the year, the market experienced the largest deleveraging event in its history. This weighed on market sentiment in the short term. However, the bears failed to push the Bitcoin price below the USD 100,000 mark. We see this resilience as a sign of intact structural support. Bitcoin is currently trading within the so-called bull-market support band, which has proven steadfast several times in the recent past. The base scenario anticipates a positive market trend in the fourth quarter, potentially led by Bitcoin. While the positioning remains overweight, it is to be tactically adjusted to the original target level.

TAA Plus Balanced CHF

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^{This publication is intended for information and marketing purposes only, and is not geared to the conclusion of a contract. It only contains the market and investment commentaries of Maerki Baumann & Co. AG and an assessment of selected financial instruments. Consequently, this publication does not constitute investment advice or a specific individual investment recommendation, and is not an offer for the purchase or sale of investment instruments. Maerki Baumann & Co. AG does not provide legal or tax advice. In addition, Maerki Baumann & Co. AG accepts no liability whatsoever for the content of this document; in particular, it does not accept any liability for losses of any kind, whether direct, indirect or incidental, which may be incurred as a result of using the information contained in this document and/or arising from the risks inherent in the financial markets. Maerki Baumann & Co. AG holds a Swiss banking license issued by the Financial Market Supervisory Authority (FINMA).}

Editorial deadline: 24 October 2025

Maerki Baumann & Co. AG
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