Although 2025 was marked by uncertainty, falling interest rates and a weaker economy, the markets remained stable. Investments in equities performed well, while investments in bonds showed mixed results. The strong Swiss franc had a negative impact on the export sector, but strengthened purchasing power in Switzerland.
Review of geopolitics, monetary policy and the economy
2025 was a year of considerable geopolitical and trade-related uncertainty. Global economic growth remained positive overall, but slowed noticeably over the course of the year. While the tariff increases announced by the US government, some of which have already been implemented, led to turbulences on the financial markets and weighed on global trade, inflation continued to fall in most regions.
Amid fiscal imbalances and a moderate slowdown, the US economy proved resilient, while Europe remained economically fragile and China continued to be impacted by the real estate crisis, weak domestic consumption and trade disputes. The Swiss economy also suffered from the global slowdown, with rising unemployment and the sharp appreciation of the Swiss franc putting pressure on the economy. Central banks pursued clearly expansionary monetary policies: the Swiss National Bank (SNB) brought its key interest rate down to 0.0%, while the European Central Bank (ECB) and the US Federal Reserve also continued their policies of monetary easing.
Equities
In 2025, stock markets performed well overall, although they showed high volatility. The US tariff announcements on so-called ‘Liberation Day’ in the second quarter initially sparked a sharp decline in share prices. However, following the temporary suspension of the majority of tariffs, the markets quickly recovered. US equities proved resilient over the course of the year. Despite high valuations, particularly in the technology sector, share prices were supported by solid corporate earnings, expectations of interest rate cuts and the US’s leading role in the field of artificial intelligence. However, as the year drew to a close, scepticism regarding highly valued AI stocks grew. European equities benefited from attractive valuations, defensive sectors and growing defence spending, resulting in an overall stable and positive performance.
The Swiss stock market also performed remarkably well, driven by defensive sectors, impressive corporate results and its relative attractiveness by international standards. Emerging market equities as a whole showed very positive results as well.
Bonds
In 2025, bond markets were affected by both monetary easing and growing fiscal risks. In the US, high budget deficits and Moody’s downgrade of the credit rating were a cause for caution, while yields on long-term US government bonds stayed mostly stable.
In Europe, rising defence spending, higher debt ratios and the downgrading of France’s credit rating prevented yields from falling significantly, even though the ECB’s interest rate cuts provided some relief in terms of monetary policy.
Although bonds denominated in Swiss francs were subject to fluctuations over the course of the year, they remained largely unchanged, despite falling key interest rates and their role as a safe haven.
Global bonds were also affected by high costs for currency hedging and the depreciation of the US dollar. Corporate bonds were a notable exception, benefiting from declining interest rates and thus performing remarkably well in Swiss francs.
Money market and interest
The year 2025 was characterised by falling key interest rates. In response to very low inflation and a slowing economy, the SNB gradually cut its key interest rate to 0.0%. The ECB and the US Federal Reserve also reduced their key interest rates during the course of the year. Given these circumstances, yields in the money market fell significantly. Although money market investments continued to offer stability, they generated only moderate returns compared with previous years.
Currency trends
In 2025, the Swiss franc once again proved its status as a safe haven. Amid heightened geopolitical and trade-related uncertainty, it gained significantly in value. The depreciation of the US dollar against the Swiss franc was particularly pronounced, driven by fears of a recession, growing budget deficits and uncertainty regarding US tariff policy. The Japanese yen, the Chinese yuan and the British pound also came under pressure, whereas the euro remained relatively solid against the Swiss franc. This trend had a negative impact on the Swiss export sector, but at the same time it dampened inflation and thus strengthened domestic purchasing power.