Having a dividend strategy once again paid off in the Swiss equity market last year. The SPI Select Dividend 20 Index generated an overall return of almost 20%, marking a further extension of its outperformance versus the broad Swiss Performance Index over the last ten years. Prospects are also positive for 2026. Distributions will likely go on rising and reach a new record level. In addition, at 2.8% the average dividend yield for the Swiss equity market remains at an attractive level – particularly in the current low interest-rate environment. We recommend reinvesting income in dividend stocks, firstly to benefit from the compound interest effect and secondly to profit from their minimal volatility and stabilising effect in a portfolio context. Many Swiss dividend stocks offer an attractive combination of yield level, dependability and growth. Our favourite is Zurich Insurance, which has now joined our top picks list. But if the focus is on a sharp increase in dividend yield, then Helvetia Baloise, Swisscom and Stadler deserve a mention. Furthermore, Sunrise, Clariant and Holcim are the favourites when it comes to tax-exempt distributions and high dividend yields.

At a number of Swiss equities conferences in mid-January, companies reported a persistently cautious investment and demand environment. However, most seem to be more upbeat about a more positive trend in 2026. Many companies are well positioned in growth markets (AI/data centres, electrification, e-commerce, pharmaceuticals) and have crisis-proof cost management in place in order to adapt their business structures rapidly to the new market and tariff environment. We expect to see operational progress in 2026 among Swiss small caps in particular and that this will result in improved profits. This outlook and an average valuation level militate in favour of further upside potential. Factoring in the valuation and short-term business trend, we see small caps Siegfried (top pick) and Landis+Gyr as well as the large cap Roche (top pick) as particularly interesting investment ideas. By contrast, we are adopting a more cautious stance on Interroll and Sonova shares.

The Swiss equity market has achieved an upside breakout after several months of consolidation, with all three technical momentum indicators confirming the positive technical picture. From a technical analysis perspective, we expect further upside potential for the Swiss equity market and are taking the opportunity to highlight the technical merits of our top five stocks: Holcim, ABB, Galderma, BB Biotech and Sandoz.

As part of our 2025 review and 2026 outlook, we have made changes to our Top Picks list for Swiss equities. The changes, which include a stronger focus on healthcare and small-cap stocks, reflect the fact that the investment climate and 2026 outlook have improved thanks to reduced risks in connection with US tariff and healthcare policies. The new entries are Alcon (ophthalmology) and Dätwyler (pharmaceutical packaging), both of which are poised for a new product and growth cycle. On the other hand, Schindler is fairly valued after a strong rally and has been removed from the Top Picks list.

At the UBS Best of Switzerland Equities Conference at the end of September, companies reported that economic growth continued to be dogged by uncertainties on trade as well as inflation. Throughout the summer months, consumers and producers alike remained cautious in terms of their investment decisions. A number of firms are nevertheless cautiously optimistic on account of their structural strength and transformation, Germany’s investment initiative and the ongoing boom in investment for data centres. At the same time, companies are having to contend with a weak Chinese economy. In view of the economic backdrop and company presentations, we have divided our feedback and assessment on individual firms into three categories: “Optimistic”, “Realistic” and “Cautious”. Taking into account valuations and short-term business momentum, we regard SGS, Georg Fischer and Bachem as attractive investment ideas; however, we think there are grounds for caution on shares in Straumann and Aryzta.