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A clear majority of independent asset managers believe that the disappearance of Credit Suisse will leave a vacuum in the Swiss banking sector. Visibility for the French financial market has improved after the second round of elections. Some asset managers are convinced that entry prices are now available.
Credit Suisse (CS) is leaving a big gap in the Swiss financial sector. This is the opinion of independent asset managers in Switzerland, as a new survey shows. The disappearance of CS is a loss, particularly in the corporate client business. Almost 70 percent of those surveyed are of this opinion. And just under 10 percent are also of the opinion that an important provider is now also missing in the small client business (retail banking).
In contrast, one in five independent asset managers (19 percent) is of the opinion that CS is not missing at all; the bank is hardly missed (4 percent) in asset management, as the survey also shows (cf. graphic below). 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 published.
The index summarizes various forecasts and assessments by independent asset managers in Switzerland. A total of 150 companies took part in the latest survey.
(To enlarge, simply click on the graphic)
France: Nervousness gone - now take a differentiated approach
Another topic on the minds of independent asset managers: the second round of elections in France has eased some of last week's nervousness on the financial markets. "Although the current political uncertainties and possible economic developments could lead to market fluctuations in the short term, the long-term effects are usually less dramatic. It is therefore important to take a differentiated view of the situation and not panic," said Alessandro BalestraCEO of the Eternity Wealth Partners Group in Zurich.
Instead of overreacting to short-term market movements, he recommends that investors focus on high-quality bonds and government bonds with short to medium maturities. These currently offer attractive returns with low risk. "In the equities sector, we continue to see opportunities in regions with a positive economic outlook, particularly selectively in emerging markets. Specific topics such as artificial intelligence also continue to offer potential for above-average returns."
France offers interesting entry-level courses
"The companies in the CAC 40 are predominantly globally oriented. Analysts at the major US bank Goldman Sachs estimate that only around 20 percent of their activities are in the French market," said Markus Ehret, Head of Investment Consulting at Clientis Biene Bank in the Rhine Valley.
"In mid-June, the French benchmark index CAC 40 posted its worst performance since March 2022, falling by a good 6 percent. There may now be interesting entry prices, particularly in the luxury sector," continues Ehret. The same could apply to the two major banks, BNP Paribas and Société Generale, which have rebound potential and attractive dividend yields following the recent price slumps.
Intact prospects for the SMI
Overall, the external asset managers surveyed expect the equity environment to remain favorable. The expectation of rising SMI prices compared to the previous quarter has increased significantly (cf. graph below). The assessments depend very much on the view of the central banks' interest rate decisions (cf. graphic below).
(To enlarge, simply click on the graphic)
Bitcoin euphoria flattens out
With the approval of exchange-traded funds (ETFs) on Bitcoin by the US Securities and Exchange Commission (SEC) at the beginning of 2024, the price of the cryptocurrency rose. In recent weeks, however, the euphoria has subsided somewhat. Nevertheless, it is interesting to know whether independent asset managers are now including digital assets in their model portfolios.
As the survey shows, this is not the case for the majority. A full 46 percent of the asset managers surveyed stated that Bitcoin & Co. were not an issue for them. However, 28 percent admitted to including up to 5 percent in a mandate.
(To enlarge, simply click on the graphic)
Old and new on the upswing
Overall, more than half (53%) of independent asset managers expect the price of Bitcoin to rise in the next three months. However, this positive assessment also applies to gold, where as many as 57% of survey participants expect a further increase (cf. graphic below).
(To enlarge, simply click on the graphic)
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)
Disclaimer: Produced by Investment Center Aquila Ltd.
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