Bellevue Entrepreneur Switzerland (CH)

Swiss SMid Caps as measured by the SPIEX Index decreased by 0.5% during the month (SMI +1.1%, MSCI World +0.5%, Nasdaq -6.6%). July saw global markets move into renewed volatility, although sentiment improved toward month-end. Re-escalating US-Iran tensions pushed oil higher. Inflation concerns weighed on bonds, while the Fed’s limited guidance accelerated curve steepening. The 30-year Treasury yield reached 5.27% and the 10-year Bund hit 3.20%. Sector-wise we witnessed a sharp rotation out of Technology based on AI related valuation concerns and the weakness in semiconductors. With their lower exposure to tech and AI, Swiss and European markets proved more resilient, with several broad indices remaining close to their highs. On the macro side, the Eurozone Composite PMI improved to 52 in July, the strongest reading in 5 months, with improvements in both services (51.6) and manufacturing (52). Q2 GDP expanded by 0.4% qoq in the Eurozone, beating market expectations. In Switzerland the procure.ch PMI remained firmly in expansion at 53.2, marking a fifth consecutive month above 50. Softer activity was partly offset by continued resilience in production and order books. From a sector perspective Materials (+14.1%), Communication Services (+5.7%), and Financials (+2.90%) performed best while Consumer Discretionary (-7.8%), Information Technology (-5.6%) and Health Care (-2.5%) lagged the most.

Against this backdrop, the Fund (B-share, CHF) decreased 2.0%, underperforming the benchmark by 151bps. YTD the Fund is up 6.9%, 153bps below its benchmark.

Main detractors in the month were Gurit (-32.9%), Huber+Suhner (-15.1%) and Inficon (-10.8%). Gurit was impacted by the unexpected departure of its CEO after only 12 months. At ca. 6x 2026 EBIT, the risk/reward remains attractive, supported by early signs of an operational turnaround that still need to be confirmed. Huber+Suhner was affected by the sector rotation. Recent results across the optical supply chain showed robust DC momentum, as hyperscalers reiterated aggressive investment in network infrastructure. Inficon was also affected by rotation but recovered toward month-end after raising its FY26 guidance for the second time this year. Q2 performance was broad-based, led by semiconductors but also supported by General Vacuum and HVAC.

Top 3 contributors were Tecan (+15.0%), SoftwareOne (+12.7%) and Montana Aerospace (+13.9%). Tecan benefitted from a broker upgrade focusing on the expected margin recovery from the “Rewired” programme launched by CEO Manotas and an improvement in life-science end demand as hinted by peers Danaher and Thermo Fisher. The company publishes H1 results on August 11. SoftwareOne recovered ahead of its H1 results, which should confirm solid revenue momentum across all three divisions, supported by volumes, pricing, market share gains and a growing services mix. Crayon synergies should support margin expansion, strengthening confidence in the 2026 outlook and beyond. At just 7.5x 2026 EBIT, the valuation leaves substantial rerating potential. Montana announced the expansion of its partnership with Lockheed Martin in the F-3 programme. The company displayed strong Q1 results and its balance sheet should allow for both share buybacks and/or further M&A activities.

The Q2 reporting season is coming to an end. Despite all geopolitical anxieties, the results have been stronger than expected both in terms of earnings growth and beat rates. This has especially been true for Swiss SPIEX companies with a notable absence of profit warnings in fact a record 20% to 25% of companies upgraded their FY guidance. Many quality industrials displayed improving order intake, strong demand in the US together with a stabilisation in Germany. These positive developments have prompted positive earnings revisions and bode well for a further good performance of Swiss SMID.