Monthly Report January 2025

Esteemed investors

International markets — stocks, bonds and commodities on the upswing

The international equity markets continued their positive development in the new year. For once, it is the European indices that can increase the most. The DAX rose by 9.2% in EUR, while the world stock index MSCI rose by 3.2% and the emerging market index MSCI Emerging Markets by 1.5% (both in USD). After a weak fourth quarter, the Swiss Performance Index also started 2025 with a lot of momentum and is 8.2% higher. Long-term interest rates rose in USD, EUR and CHF in the first half of the month. Because US interest rates have fallen back to their starting level in the meantime and interest rates in EUR and CHF are currently higher than at the beginning of the year, US bonds in particular were able to rise. Thanks to a further rise in gold prices and higher oil prices, the broad CRB commodity index also rose by 2.8%.

US Economy and Monetary Policy - Strong Figures and Different Approaches

With better-than-expected purchasing managers' indices and more new jobs created, the US economy remained robust even in the first weeks of the new year. For this reason, the US Federal Reserve FED refrained from cutting interest rates again at its January meeting. The European Central Bank ECB, on the other hand, continues to face a weakening economy and cut its key interest rates by 0.25% as expected. Although Donald Trump announced after his inauguration that he would impose tariffs of 25% on imports from Mexico and Canada from February 1, it appears that he wants to use higher tariffs primarily as a threatening backdrop for possible negotiations, which was received by the market with some relief.

Technology values in focus - setbacks and AI innovations

At the end of the month, there was a significant fall in the share price of technology stocks. The trigger was the news that the Chinese AI company DeepSeek had developed a chatbot that is in no way inferior to American models such as ChatGPT, although it supposedly requires significantly less computing power and the costs are significantly lower. Investors feared that demand for the most powerful computer chips and larger data centers could therefore be less high than expected. Since it is the nature of technological development to generate more output with less effort, the short-term fears seem overblown.

Successful performance of format systems

All format investments started the new year with price gains. Format Swiss equities and format Swiss equities medium-sized and smaller companies were both able to gain over 9% and are therefore also 1.7% and 2.8% above their respective benchmarks. With an increase of 7.2%, Format Aktien Schweiz was not able to quite keep up with dividend stocks for once. The returns on funds, mandates and key individual investments are included in the usual form.

Outlook - annual financial statements and possible price fluctuations

In the near future, investors will focus on the companies' annual financial statements. As a result, larger price fluctuations are possible for individual stocks in the coming weeks.

Matthias Hug and Markus Lackner

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