Selection becomes more important
Equity markets are proving more resilient than often portrayed. Despite interim setbacks, a broad market dislocation has not materialised. There is no sign of a structural downturn. Recent movements are more a reflection of positioning adjustments and increased uncertainty than of fundamental weakness. Accordingly, we remain constructively positioned for the remainder of the year.
In the United States, the fundamental backdrop remains solid. Earnings growth is intact, particularly in technology-driven sectors. However, valuations are demanding in parts of the market, increasing sensitivity to short-term disappointments.
Europe presents a mixed picture. More attractive valuations are offset by greater dependence on external factors, particularly energy prices. As a result, market developments are less stable and more volatile.
We continue to see advantages in Switzerland. The market stands out for quality, robust business models, and a defensive sector structure. In an environment of heightened uncertainty, Swiss equities offer stability, complemented by reliable dividend income, which contributes significantly to total return.
Emerging markets are gaining importance. Structural growth, improved earnings prospects and more attractive valuations support a selective allocation. In addition, many of these markets benefit from global capital shifts and a potential weakening of the US dollar.
The current market phase is characterised by increasing differrentiation. Broad market bets are losing attractiveness, while the importance of quality, valuation and sustainable cash flows continues to rise.
