Bellevue Entrepreneur Swiss Small & Mid

Swiss SMID Caps as measured by the SPIEX Index decreased by 0.4% in September (SMI -3.2%, MSCI World -1.3%). Renewed US–Iran hostilities and attacks on shipping around the Strait of Hormuz pushed oil higher in September, lifting inflation. Although the pressure stems largely from energy supply rather than strong demand, central banks chose to act against the risk of second-round effects. The ECB raised rates for the second time this year, and the Fed followed with its first hike since 2023. The hawkish turn triggered a broad bond selloff, pushing the 10-year Treasury yield above 5% and Bund yields to 17-year highs. Renewed diplomatic efforts toward month-end offered some hope of easing energy pressure. Despite softer consumer sentiment, the euro area economy continues to prove resilient. The Eurozone Composite PMI rose to 53.1, its highest level in more than three years, as manufacturing reached a fresh four-year high of 52.9 and services accelerated to 53.0. In Switzerland the Manufacturing PMI fell to 55.3 in September, slightly below market expectations of 56 and down from a 3-mnth high of 57.1 in August. Although growth slowed across several key components like production and employment, the reading marked the 7th consecutive month of expansion. From a sector perspective Information Technology (+4.3%), Materials (+2.3%), and Industrials (+1.8%) performed best while Consumer Staples (-7.2%), Communication Services (-6.7%) and Utilities (-5.0%) lagged the most.

Against this backdrop, the Fund (B-share, CHF) declined by 0.7%, underperforming the benchmark by 24 bps. Ytd the Fund is up 5.4%, 296 bps below its benchmark.

Main detractors in the month were Swissquote (-13.0%), SoftwareOne (-9.5%) and Kardex (-7.9%). Swissquote entered September with weak momentum after the collapse of its H1 crypto revenues leading to a lower FY guidance. The investment case is pretty much de-risked and valuations have normalised. After reporting strong Q2 results at the end of August - including 31% EBITDA growth, supported by double-digit revenue growth and Crayon acquisition synergies – SoftwareOne experienced some profit-taking, compounded by a broader sector rotation away from software. Little news on Kardex but the H1 Remstar profit warning is still weighting on sentiment. Management is guiding for FY 2026 order and revenue growth of 15–20% and an EBIT margin of 8–10%, with a return to the 10–14% target range in H2. The company is investing in future growth and this requiring some patience from investors.

Top 3 contributors were Gurit (+21.6%), Tecan (+18.6%) and Inficon (+15.02%). Gurit continued to perform well, supported by H1 which confirmed solid profitability in the new operating perimeter. Energy-price volatility, electrification and the growing emphasis on energy sovereignty reinforce the need for local renewable-energy ecosystems, in which Gurit is an important player. Tecan benefited from growing awareness of its AI partnerships with NVIDIA and Anthropic, positioning it as an enabler of autonomous labs. This was further underpinned by recovering biopharma demand after a muted period, potentially a signpost of customer adoption. Inficon benefitted from a rotation into semiconductors as AI-driven demand signals and improving memory-market dynamics reinforced confidence in the sector’s capex outlook. Upcoming Q3 results should confirm the excellent momentum in its Semi division and could trigger another upward revision to its guidance, which we continue to view as conservative.

September brought some weakness in European equities but Swiss Small and Mid caps faired remarkably well. Rising bond yields and renewed inflation concerns outweigh resilient economic activity. Earnings and investment spending provide support, but financing costs make balance-sheet strength increasingly important. September’s flash eurozone PMI showed the strongest private-sector output growth since April 2023, with both manufacturing and services expanding. The ECB projected growth of 0.9% in 2026 and 1.4% in 2027. In the US, we are witnessing one of the strongest earnings cycle of modern history, led by tech and AI. Swiss industrial and tech and companies indirectly benefit from this growth shock as specialist suppliers. The themes of sovereignty, energy security and electrification are also becoming crucial for all and gas importing countries. The SPIEX index experienced a significant reshuffling in September as Sandoz and Galderma found their way into the SMI; instead we welcomed Kühne & Nagel, Swisscom and DSM Firmenich.