At the start of each year, stock market observers like to peer into their crystal balls to find out where prices could go next. As regards 2024, macroeconomic conditions could lead to considerable uncertainty in the first half of the year especially. It was only in December that the State Secretariat for Economic Affairs (SECO) revised its forecast for the growth of the Swiss economy in 2024 from 1.2 down to 1.1 per cent. That would mean the economy performing below average on a historical perspective for two years in succession. Among its reasons, the expert group cites the lack of great dynamism in the eurozone, which is threatening to put a brake on exports. Nevertheless, the situation could brighten over the course of the year. For one thing, domestic consumption is expected to have a supporting effect, while the second term should also see a return to some sort of normality. This should in turn provide a tailwind for the economic sector next year, driven by a recovery in the global economy. The SECO is forecasting GDP growth of 1.7 per cent for 2025. Meanwhile, inflation is on the downward slope, having now remained within the zero to two per cent bandwidth targeted by the Swiss National Bank (SNB) since June. The SECO anticipates inflation to reach 1.9 per cent for the current year. This will in turn raise hopes of cuts in interest rates.
To ensure they do not get their fingers burned in the “stock market game”, investors should never put all their eggs in one basket. The purchase of a single share is risky and really not a good strategy when it comes to generating wealth the conventional way. With one accord, experts advise having a broadly spread exposure to the equity markets in order to share in the potential dividend and earnings income without running the risk of total loss. The FuW Swiss 50 Index of business magazine Finanz und Wirtschaft offers a clever way of diversifying investment in the Swiss equity market. This barometer contains the 50 largest companies listed on the SIX Swiss Exchange. Its members are divided into two segments and weighted equally within each segment. This emphatically counteracts the clustering effect that can be seen in the SMI. The SMI heavyweights Nestlé, Novartis and Roche, for instance, are not even in the top 10 of the FuW Swiss 50 Index, but UBS, the top performer in 2023, is there. The rule-based index is reviewed twice a year, in May and again in November, and adjusted where necessary. The weightings are also recalculated in a rebalancing process.
An exchange traded product (ETP) on the FuW Swiss 50 Index is a convenient way of adding the index to a portfolio. The participation instrument reflects the development of the broadly diversified barometer, allowing investors to share fully in the upside potential of the Swiss equity market. The ETP+ on the FuW Swiss 50 Index is not only an effective investment product, though, but also a low-cost one, coming with a fee of just 0.72 per cent p.a. To compensate for this, the dividends paid flow into the calculation of the index on a net basis. The product has no term limit and can be bought and sold on any stock market day.
The ETP+ offers not only 1:1 access, but also an additional protective function thanks to specific collateralisation: a pledge is deposited with SIX SIS AG for every exchange traded product. If the price of the certificate rises, Leonteq increases the pledge – and vice versa.
We look forward to answering all of your questions about our products and how they are traded. Please don't hesitate to get in touch! Phone: 058 800 11 11, email info@leonteq.com or contact us here.