Financial markets in 2025

In the reporting year 2025, previously high inflation rates worldwide showed a downward trend, even though the central banks' target ranges had not yet been fully achieved. U.S. trade policy - characterised by higher tariffs - created significant uncertainty in the markets and the real economy from April onwards, leading to a pronounced de­pre­ci­a­tion of the U.S. dollar.

Global economic output grew mod­er­ately and several central banks adopted a more accommodative policy stance. In Switzer­land, the Swiss National Bank lowered its policy rate by 0.5 percentage points in the first half of the year. As a result, after only three years of positive interest rates, Switzer­land returned to a zero­interest­rate en­vi­ron­ment again. The Swiss 10-year yield fluctuated over the course of the year, but closed at the previous year's level of just over 0.3% (see purple line in the chart). In the US, policy rates were lowered by 0.75 percentage points by year end as a result of uncertain trade policy. The 10-year yield fell by 0.4 percentage points over the course of the year (see light blue line in the chart).

This market en­vi­ron­ment led to a generally flat price per­for­mance for Swiss bonds, while global bonds in local currency generated positive returns. Corporate Credit spreads remained largely unchanged. Broad equity markets recorded price gains worldwide and across all regions. A decisive element was the treatment of USD currency risk: the global equity index achieved a return of around +14% when hedged back to the Swiss franc (see green line in the chart) and around +6% without hedging.

Geopolitical tensions, high government debt, and increasing discussions about the stability of democratic systems caused ad­di­tional uncertainty. The price of gold rose significantly. Real estate in­vest­ments in Switzer­land benefited from decreasing discount rates and generated price gains, while global real estate in­vest­ments posted slightly positive quarterly returns for the first time after several challenging years. Private market in­vest­ments generated modest valuation gains. For the third year in a row, their returns lagged significantly behind those of listed equities.