Anyone who invested in Swiss stocks ten years ago, shortly after the most acute phase of the financial crisis, could make a lot of money. The blue-chip index SMI has more than doubled its value since December 23, 2009 and posted an overall performance of 125%. Certain individual stocks make even the advances of the SMI fade.
The shares of construction chemicals manufacturer Sika have a total return of 735% for the same period – this is the best performance of all Swiss blue chips. The total return, the total rate of return (TRR), takes into account not only the price performance, but also the (reinvested) dividends.
Strong insurance values
Sika is followed at some distance by papers from specialty chemicals and pharmaceuticals supplier Lonza and insurer Swiss Life. Sika was not part of the SMI at the beginning of the observation period, but was only included in spring 2017. Givaudan was back in the leading index in 2011. Lonza and Swiss Life temporarily fell out of the blue chip tableau in the ten years and came back later.
Total yield in the SMI since December 23, 2009 *
What is striking is the good performance of insurance stocks with substantial dividends such as Swiss Life (current return: 3.4%), Swiss Re (5.1%) or Zurich Insurance (4.7%). The miserable performance of the shares in the large bank Credit Suisse is less surprising. With a minus of more than 60%, they are by far the worst SMI title of the decade. The securities of the second major Swiss bank, UBS, were also unable to create shareholder value for over ten years.
Tech dominates in the SPI
The broad Swiss stock market represented by the Swiss Performance Index (SPI) shows a completely different picture. So far, technology values have been particularly impressive here. The papers by Flamatt’s X-ray and high-frequency specialist Comet, the Austrian semiconductor and sensor manufacturer AMS and the measurement and control technician Inficon recorded a comparably strong overall performance.
The total return on the shares of the Baar private equity specialist Partners Group and the investment company BB Biotech, which specializes in life sciences, shows that financial papers can also be successful in the interests of shareholders.
Total yield in the SPI since December 23, 2009 *
The likelihood of losing money with SPI shares over ten years was far greater than with SMI papers, where only three stocks – UBS, LafargeHolcim and CS – destroyed shareholder value. In the SPI, 37 out of a total of 215 securities have a negative total return over ten years.
Among the worst SPI values are companies that have been struggling with operational problems for a long time, such as the baked goods manufacturer Aryzta, which is still in a turnaround, or the long steel manufacturer Schmolz + Bickenbach, which had to carry out a capital increase last week to remain solvent. The shares of the solar technology supplier Meyer Burger, which has been financially struggling for years, are also in an extremely bad position over ten years.
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