By Joel Frick, portfolio manager at Bendura Bank

Greetings from Jesolo – or, to be more precise, from a campsite on the Italian Adriatic coast. Anyone who travels with children knows that holidays here are less of a quiet retreat and more like a little world of their own, with sand between your toes, bikes outside the mobile home, gelato in the afternoon and the daily dilemma of whether to head for the pool, the beach or the playground first.

That is precisely what makes it so appealing. Jesolo is not a place where you have to search long and hard for things to do. Much of it is straightforward, lively and immediate. The days follow a simple rhythm: the sea in the morning, shade at midday, pizza or pasta in the evening, or a stroll along the promenade. In between, there is plenty of scope to take a step back from everyday life and gain a fresh perspective.

A campsite is almost a mini-lesson in organisation and pragmatism: lots of people, different needs, limited space – and yet many things work surprisingly well when the infrastructure is right and everyone knows what matters. It’s not entirely different when it comes to investing either.

What I appreciate about Switzerland is precisely this combination of reliability, quality and foresight. It is evident in the way people work, discuss matters and make decisions. Swiss investors are often very discerning, but also very thoughtful. They ask the right questions: not just about returns, but also about risks, stability, currencies and how a portfolio will fare through different market phases.

More opportunities than risks

At the same time, Switzerland has a particular ability to think long-term without losing sight of the practicalities. This fits well with our work as portfolio managers. For, particularly in an environment where markets are heavily driven by individual themes such as artificial intelligence, monetary policy or geopolitical tensions, it is crucial not to chase every short-term movement.

For Swiss investors, we currently see more opportunities than risks, particularly in Europe. A key reason for this is that inflation expectations could fall further, supported by falling oil prices. At the same time, fiscal stimulus in Europe is likely to provide additional impetus for growth. If this also improves consumer confidence, it could give European companies a boost.

Europe is overweighted

In our portfolios, we adopt a core-satellite approach with a focus on the utilities, information technology and industrial sectors. This combination allows us to combine stable, structurally sound business models with selective growth opportunities. Europe is overweighted in this strategy because, in our view, the region currently offers a more attractive risk-reward ratio than is widely perceived.

However, a key prerequisite remains that Europe improves its productivity growth. Political hurdles would also need to be better coordinated, and dependence on other major powers should continue to decline. Furthermore, should the AI hype on the markets cool off somewhat, the so-called ‘old economy’ – and Europe in particular – could benefit from capital rotation.

Cautious on the US dollar

We are currently actively avoiding a neutral or overweight position in US equities. The main reason lies in the high valuations of many AI-exposed companies and the resulting concentration risk in the major equity indices. This is particularly relevant for Swiss investors with a global focus, as many global portfolios now depend more heavily on a few US technology stocks than is apparent at first glance.

We also remain cautious on the US dollar and avoid an overweight position at the overall portfolio level. Confidence in the greenback has suffered recently, whilst lower inflation expectations and the monetary policy debate in the US could limit further appreciation. Added to this is the strained fiscal policy situation, which could become even more acute in the run-up to the US mid-term elections.

For us, this means: seizing opportunities, but taking concentration risks seriously. A good portfolio does not need to be maximally exposed to every trend. Rather, it should be robust enough to perform even when market leadership shifts – just as a good campsite does not depend solely on perfect weather, but on good planning, reliable infrastructure and the ability to respond calmly to changing conditions.