Bellevue Entrepreneur Switzerland (CH)

Swiss SMID Caps as measured by the SPIEX Index declined (-6.5%) in the month, outperforming the SMI (-7.6%). The drawdown was driven by the escalation of the Iran conflict, including the temporary closure of the Strait of Hormuz, triggering a sharp energy shock with oil prices exceeding USD 100/bbl. Central banks remained on hold during the month but with a clear hawkish bias given the risk of a supply side energy inflation shock. Towards month-end, first signs of de-escalation caused modest pullbacks in energy prices. The Eurozone Composite PMI edged down to 50.5 in March, signaling continued but slower expansion. Overall growth was dragged down by a sharp reduction in the service sector, while manufacturing proved resilient (51.6), with Germany hitting a 45-month high of 51.7. The procure.ch manufacturing PMI jumped to 53.3 from 47.4, well above expectations, signaling a clear return to expansion - the first since December 2022. From a sector perspective Utilities (+3.8%), Financials (-0.6%) and Real Estate (-0.7%) performed best while Industrials (-10.4%), Consumer Discretionary (-9.3%) and Information Technology (-8.4%) lagged the most.

Against this backdrop, the fund (B shares, CHF) declined -5.9%, outperforming the benchmark by 60 bp.

The main detractors during the month were Burckhardt Compression (-17.9%), Montana Aerospace (-17.1%) and Inficon (-16.8%). For Burckhardt Compression we understand the H2 order momentum (year end 31.3) did not improve a lot sequentially and customers have stayed cautious amid uncertainty in the Middle East. Despite short term turbulences, the backdrop is remains favourable to Burckhardt’s narrative of energy security, transition and infrastructure capex spending. Management expressed confidence in achieving the mid-term targets. Montana aerospace corrected massively amidst Airbus revising its production guidance. Despite the war in Iran, Montana reiterated its conservative guidance for 2026 and sees stable supply chains so far. However, 2027 guidance fell short of analysts’ expectations leading to negative EPS revisions. Inficon had pre-released 2025 revenue as well as EBIT. In the wake of the many actual uncertainties management’s 2026 revenue guidance was at the lower end of consensus expectations and the muted margin outlook was a damper despite sound activity and order intake in the semi space. We expect further updates in the coming quarters and remain positive.

The top three contributors were Aryzta (+11.8%), Gurit (+43.5%) and Polypeptide (+10.3%). Aryzta benefited from solid FY 2025 results, slightly above expectations, particularly at the free cash flow (FCF). It guided for low to mid-single digit (L-MSD) organic growth and EBITDA expansion. Gurit released encouraging 2025 results, highlighting improved profitability from a streamlined perimeter following the exit from the carbon fiber business. With guidance pointing to single digit revenue growth and margin expansion, 2026 is set to confirm the improving trends seen in H2. PolyPeptide reported very strong FY 2025 results, driven by a sharp profitability increase following the ramp-up of a key GLP-1 contract. For 2026, it guided for 20-25% revenue growth and mid- to high-teen margins, implying a 400-600bps improvement, which should support strong EPS growth.

The Middle East and Hormuz remain key uncertainties. The magnitude and duration of the conflict and its effect on the global economy remain difficult to assess, and markets are reacting sensitively in both directions. Following a sensitivity analysis of the portfolio, we implemented selective adjustments to balance the portfolio relative to energy prices and interest rate volatility. Overall, the fund performed relatively well and we could close the month with slight outperformance. Interestingly, SMID did not underperform in the draw down, despite higher exposure to industrials. Defensive sectors like healthcare, household & personal care (HPC) and food and beverage (F&B) did not provide shelter and the structural exposure of industrials names to themes like defence, sovereignty, energy transition, electrification etc. makes the segment potentially less cyclical.