Bellevue Entrepreneur Swiss Small & Mid

Swiss small and mid caps, as measured by the SPIEX Index, where flat (-0.2%) in November, similar to the SPI (-0.3%). The US election was the main event with the victory of D. Trump and the Republican in control of the two chambers. US equities bounced back, with US small caps (+10.2%) outperforming large caps (S&P +5.3%). The EUR/USD fell temporarily to its lowest level since 2022. The global economic narrative remained generally positive, with the US confirming its strength, underpinned by good consumer confidence. In Europe, the Flash PMI for the Euro Area sequentially deteriorated to 48.1 vs 50 in October with both services and manufacturing now in contraction territory. In Switzerland the manufacturing PMI fell to 48.5 in November from 49.9 with services unchanged at 51.8, above the growth threshold for the second consecutive month. In terms of sector performances, communication services (+5.5%), financials (+4.9%) and real estate (+4.4%) performed best, while consumer discretionary (-7.6%), materials (-7.2%) and information technology (-5.8%) lagged the most.

Against this backdrop, the fund declined 0.2% (CHF / B shares) in the month, in line with the benchmark.

Main contributors in the month were Swissquote (+17.5%), Accelleron (+6.7%) and Galderma (+11.7%). Swissquote has built a successful one-stop-shop for retail investors to trade almost any asset. It was the first Swiss bank to introduce crypto in 2017 and the asset class grew to account for 22% of trading income in the boom year of 2021 versus 11% in H1 2024. The Trump election win has propelled crypto to new highs and Swissquote will benefit. Accelleron pursued its ascent. The global supplier of high power turbochargers for the marine and energy markets relies to 75% on aftermarket revenues and benefits from positive demand in all end markets. Galderma reported solid Q3 top line growth of 5.1% and management confirmed FY guidance. A unique sizable pure-play in dermatology, the growth potential of aesthetics injectables and the margin expansion potential remain attractive.

Main detractors in the month were Roche (-7.6%), Clariant (-11.5%) and Huber+Suhner (-8.0%). Roche suffered along the healthcare names from the insecurities following Kennedy Jr.’s nomination at the head of the US department of health. Later in the month Roche announced that the SKYSCRAPER-01 trial did not meet the co-primary endpoint, removing some option value. The Basler group also announced the acquisition of biotech company Poseida for USD 1 bn. Clariant CMD failed to give the share new impetus. Huber+Suhner suffered from profit taking after a strong share price performance and slightly weaker than expected order intake, due to persistent weak environment in transportation, while industrials continue to benefit from a positive environment in aerospace and defence. The company confirmed its FY guidance of positive organic growth and positive margin expansion of 40 to 90 bps.

After the SNB move, the ECB is expected to be next, maybe even before the US. Compared to the Fed, the European Central Bank finds itself in a less complicated situation. The business cycles of the US and Europe have decorrelated a lot in the last 6-12 months and while growth expectations rise in the US, it is the opposite in Germany and a large part of Europe. Another positive factor for Europe and Switzerland is China. The economic momentum seems less fragile and we have witnessed some positive macro data. The Caixin China General Manufacturing PMI increased to 51.1 in March, the fifth straight month of growth in factory activity. Copper also reached an 11-month high. This should also bode well for Swiss companies and industrials in particular.