Investing money in Switzerland. A global success story
Whether equities, government bonds or Swiss francs – many investments made in Switzerland develop particularly positively. Ten observations on financial market history show which investments are amongst the best in the world due to their returns or risk profile.
From the study "Swiss Financial Market History since 1900" published in July, it is possible to summarize ten observations on investments made in Switzerland:
- Switzerland is home to the world's seventh-largest stock market. Its capitalization is three times larger than Switzerland’s share of global gross national product.
- The Swiss stock market – unlike its European neighbours – regularly increases not only in size, but also in diversity.
- Since its creation, the Swiss franc has been the world’s strongest currency.
- The Swiss franc is the currency with the lowest inflation rate in the world.
- Swiss government bonds have the world's best historical performance.
- Swiss government bonds have the second-lowest risk levels in global comparison.
- Swiss equities do far better than average in local-currency terms.
- Swiss equities deliver the fourth-best performance in the world, measured in US dollars.
- Swiss equities display the fourth-lowest risk profile in the world.
- The average risk premium for Swiss equities is 3.6% p.a.
You can find the full study (Credit Suisse Research Institute, Switzerland: A Financial Market History“, July 2017) here.
Two charts illustrate the quality of Swiss investments on a long-term perspective:
Distribution of annualized Swiss equity risk premiums, 1900 to 2016
Source: Elroy Dimson, Paul Marsh and Mike Staunton, “Triumph of the Optimists”, Princeton University Press, 2002, and Credit Suisse
The value of Swiss equities has increased 1,938 times since 1900
Source: Elroy Dimson, Paul Marsh and Mike Staunton, “Triumph of the Optimists”, Princeton University Press, 2002, and Credit Suisse
