View of the Head of Head of Private Banking Zurich
Andreas Feller Head of Private Banking Zurich
Switzerland: The ultimate investment destination in the heart of Europe
Switzerland lies in the heart of Europe which is also visible by the composition of its population: 2.9 million of the 8.7 million permanent resident population has a migration background.[1]
Chart 1: In the heart of Europe
Source: About Switzerland, 05.05.2023.
A land of pioneers
Economists claim that Switzerland's ability to innovate is a key factor in its economic success. Switzerland's high innovation capability has also been recognized in various international rankings in this field e.g. the Global Competitiveness Report where Switzerland has consistently ranked at the top in recent years. Furthermore, Switzerland ranked first in the 2022 Global Innovation Index for the 12th consecutive year as that the country leading globally in innovation outputs, and specifically in patents by origin, software spending, high-tech manufacturing and production and export complexity.
Innovative projects flourish in the fertile environment of Switzerland's education system (Times Higher Education Ranking) thanks to its longstanding tradition of collaboration between the public and private sectors and continuous investments in the research and development of innovative products. It should therefore come as no surprise that innovative projects like Solar Impulse originate in Switzerland. Did you know, for instance, that instant coffee, zip fasteners, Velcro, milk chocolate, and the computer mouse were invented in Switzerland?[2]
Chart 2: A country of innovation
Source: The world leader in innovation through research and development , 2023.
Investing in Switzerland: Where tradition meets innovation for unmatched investment potential
Investing in Swiss companies offers the benefits of a country with a liberal economic system, political stability, close links with foreign markets, focus on innovation and research, global competitiveness, an internationally competitive tax environment, access to the top global talent pool[3], diversification opportunities, and a reputation for quality and precision.
Swiss equities have one of the highest excess dividend yields and returns on invested capital (ROIC) globally.[4] Over the last 20 years, Swiss equities have outperformed global equities. In particular Swiss Small & Mid Cap companies have outperformed the MSCI world strongly despite a lower realized annual volatility.[5]
Examples of such companies include
* Ranked among the 100 most innovative companies in the world, Clarivate ranking.
[1] The "population with a migration background" as defined by the FSO includes all foreign nationals and naturalized Swiss citizens, except for those born in Switzerland and whose parents were both born in Switzerland, as well as Swiss citizens at birth whose parents were both born abroad.
[2] 8 Swiss inventions that changed the world.
[3] Global Talent Competitiveness Index INSEAD.
[4] Exceed dividend yields based on premium over 10-year government bond yield, Bloomberg, Rothschild & Co.
[5] Cumulative returns since 2000 vs MSCI World Index, Bloomberg, Rothschild & Co.
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