Asset managers waver between gold and Bitcoin
Some asset managers in Switzerland would have preferred Credit Suisse to continue to exist rather than be integrated into UBS, according to the latest AVI Index. The "anything-goes mentality" currently dominates the stock market. The EAMs see further price potential in both gold and Bitcoin.
The Federal Council report on banking stability is also a concern for independent asset managers (external asset managers, EAMs) in Switzerland. Just under a third of those surveyed (28 percent) believe that the federal government should have taken over the faltering Credit Suisse (CS). This would have maintained a certain degree of competition between two major Swiss banks.
However, 35 percent of EAMs are also of the opinion that there was no other economically viable alternative to the takeover of CS by UBS. This means that more than a third of asset managers are against subsidizing an ailing bank (cf. graph below).
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These assessments are based on the latest Aquila Asset Manager Index (AVI), which the Swiss Aquila Group every three months in cooperation with finews.ch is published. The index summarizes various forecasts and assessments of independent asset managers in Switzerland. In each case, 150 firms participate in the latest survey.
Interest rates tip the scales
Overall, the EAMs surveyed expect the good equity environment to continue, even if expectations of further increases in SMI prices have fallen slightly compared to the previous quarter (cf. graph below). The assessments depend very much on the view of the central banks' interest rate decisions (
"The entire cycle of interest rate cuts will be postponed significantly further into the future, which in our view is to be welcomed, as this should maintain the positive underlying sentiment on the markets for longer than expected," says Peter LipprossSenior Relationship Manager at the company Geneva Invest (Europe)which specializes in fixed-interest investments. "As long as there is an expectation in the market that the next interest rate move will be a cut and not an increase, sentiment should remain positive."
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"And she did it again," says again Urs LysserChairman of the Board of Directors and Partner of Ambassador Investment Partner (AIP) in Solothurn. This refers to the surprise of the Swiss National Bank, which has initiated the cycle of interest rate cuts and once again demonstrated its independence.
Dividends as an important factor in the Swiss market
"Companies and investors seem to have come to terms with the high interest rates. This is the only explanation for many global share indices reaching new highs. We can be confident for the rest of the year, but not euphoric. The SMI should also benefit from falling interest rates due to its dividend heavyweights," Lysser continues.
In their asset allocation, the EAMs attach great importance to equity investments and gold (cf. graph below). Both investment classes are significantly overweighted compared to a balanced portfolio.
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"Our clients are taking advantage of the current interest rate environment to switch into high-quality bonds and benefit from attractive returns," explains Manuela Rupf-DiethelmManaging Partner at Alpique Swiss Wealth Partners. "In turn, the stock markets continue to be driven by the technology sector with high profits and the topic of artificial intelligence (AI)," continues Rupf-Diethelm.
Alternatives outside the traditional financial system
Of particular interest in the latest survey is certainly the fact that independent asset managers believe that both the price of gold and the price of the best-known cryptocurrency, Bitcoin, have further upside potential. (cf. graphic below).
The two asset classes could hardly be more different (physical and digital respectively); however, many investors evidently see gold and Bitcoin as valid investment alternatives outside the traditional financial system.
(To enlarge, simply click on the graphic)
Both the yellow precious metal and Bitcoin reached new highs in the first quarter of 2024; 44% of respondents expect further advances for gold; skepticism prevails somewhat for the cryptocurrency (cf. graph below); "only" 38 percent of survey participants currently see prices continuing to rise, while 42 percent expect prices to fall - this assessment fits in well with the notoriously high volatility in this asset class.
(To enlarge, simply click on the graphic)
Disclaimer: Produced by Investment Center Aquila Ltd. Information and opinions contained in this document are gathered and derived from sources which we believe to be reliable. However, we can offer no under-taking, representation or guarantee, either expressly or implicitly, as to the reliability, completeness or correctness of these sources and the information pro-vided. All information is provided without any guarantees and without any explicit or tacit warranties. Information and opinions contained in this document are for information purposes only and shall not be construed as an offer, recommendation or solicitation to acquire or dispose of any investment instrument or to engage in any other trans action. Interested investors are strongly advised to consult with their Investment Adviser prior to taking any investment decision on the basis of this document in order to discuss and take into account their investment goals, financial situation, individual needs and constraints, risk profile and other information. We accept no liability for the accuracy, correctness and completeness of the information and opinions provided. To the extent permitted by law, we exclude all liability for direct, indirect or consequential damages, including loss of profit, arising from the published information.
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