Difficult times lie ahead for independent asset managers in Switzerland. UBS continues to integrate Credit Suisse, the financial market outlook is gloomy, and global debt could reach unprecedented levels. There's still a glimmer of hope for the industry, the latest AVI Index reveals.
The majority of independent asset managers in Switzerland view the «future» UBS warily. Twenty-four percent of those surveyed believe the Swiss financial industry loses international relevance by having only one major domestic bank. Nearly 31 percent think that without Credit Suisse, there won't be sufficient competition.
Those are some of the key conclusions emerging from the latest Aquila Asset Manager Index (AVI), produced quarterly by the Swiss Aquila Group in cooperation with finews.com. The index summarizes the forecasts and assessments of 150 independent asset managers in Switzerland.
More Net New Money
Due to uncertainty resulting from Credit Suisse, independent asset managers benefitted from high new money inflows. Over the past six months, 52 percent of the survey participants reported a significant increase in client assets.
A 33 percent increase in market performance and 44 percent higher new money inflows are the main reasons cited for increased assets under management. This suggests independent asset managers benefited from dissatisfied Credit Suisse clients and those unwilling to switch to UBS.
Purpose Based Optimism
As they were at the beginning of the year, respondents were optimistic about financial market developments. Sixty-five percent of asset managers see the Swiss Market Index (SMI) rising, a more optimistic view than the 51 percent who did the previous quarter.
The assessment is likely based on a great deal of temporary optimism, with the outlook subdued, according to Urs Luescher, founding partner of Sinvest Finanz. «The indebtedness of the world and private households can develop into a global problem. In the US alone, credit card loans have risen to a new high, and at higher debt interest rates. This cocktail could have a massive impact on consumption. We're therefore underweighting equities and focusing primarily on good quality stocks in Switzerland with attractive dividends,» he says.
Three months from now, dependent asset managers see the Swiss Market Index (SMI) at a level of 10,705 compared to 10,996 at the time of the survey.
Less Optimism Among Gold Bugs
Independent asset managers are less bullish on gold than before, expecting the price to reach $1,974 per troy ounce by year-end from $1,915 currently, falling short of $2,000.
They estimate ten-year US Treasuries will yield 4.27 percent in three months compared to 4.54 percent, and see the euro-franc exchange rate at 0.9413 versus 0.9670, likely related to economic weakness in Germany.
- The next AVI index will be published in January 2024.
