Passion for Swiss equities

zMonthly SMC Fund 12/2023

Monthly report December 2023 of the zCapital Swiss Small & Mid Cap Fund (class A)

The fund posted an annual performance of +5.0% in 2023 (SPI Extra +6.5%). We bought shares in Swatch Group, Bachem, Gurit and Clariant and were sellers in BKW, VZ Holding and Komax.

Following the previous month's gains, the positive sentiment continued in December. The US Federal Reserve sent markets into euphoria. Fed Chairman Powell signalled that the hiking cycle was over and that rate cuts were being considered for 2024. Overall, 2023 was a year of mostly positive headlines. The Swiss equity market was unable to keep pace due to its defensive weighting and the strength of the Swiss franc.

Since the end of October, equity markets have been anticipating a dream scenario of full employment, moderate economic growth, lower energy prices, subdued inflation and falling interest rates. We doubt that this near-perfect stock market world will materialise. Discussions with managers give us a more nuanced picture. Politics is also a big unknown, particularly the US presidential election in November.

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