Bellevue Entrepreneur Switzerland (CH)

Swiss SMID caps as measured by the SPIEX Index rose 2.2% in the month, outperforming the SMI (-0.6%). January was marked by heightened market volatility amid evolving geopolitical and policy developments. Early concerns surrounding Greenland eased following de-escalation at the WEF in Davos. In the US, the nomination of Kevin Warsh as the next Fed Chair supported the USD and triggered a sharp correction in precious metals. The French parliament finally approved the 2026 budget, while discussions between Ukraine and Russia continued, although progress on territorial issues remained limited. December inflation in Europe was confirmed at 1.9%, indicating a modest improvement in the industrial sector. The eurozone’s Composite PMI eased to 51.5 in January but continued to signal expansion, supported by a resilient services sector (51.9), while manufacturing showed signs of improvement from a low base (49.5). In Switzerland, the procure.ch manufacturing PMI rose to 48.8 from a revised 46.4 in December, signaling a modest easing on the industrial sector. The improvement was driven by stabilisation in production, with the output index climbing to 50.8, its first expansion since August. From a sector perspective, Real Estate (+6.8%), Materials (+6.0%) and Industrials (+4.9%) performed best while Utilities (-11.9%), Consumer Staples (-1.1%) and Financials (+0.2%) lagged the most.

Against this backdrop, the fund (B share) rose 2.4%, outperforming the benchmark by 26 bps.

The main detractors during the month were SoftwareOne (-12.3%), ALSO Holding (-7.5%) and Temenos (-14.1%). SoftwareOne and ALSO were negatively impacted by the weakness in the software sector, with the market overlooking early signs of improvement in the broader European IT services sector, as well as more encouraging developments in the US, where AI adoption is most advanced. Temenos, meanwhile, saw profit-taking following the pre-announcement of strong Q4 results. Revenues and EBIT came in 5% and 21% above expectations, respectively, driven by robust performance in Subscription & SaaS and Maintenance. This momentum bodes well for 2026 and should support double-digit consensus EPS upgrades.

The top three contributors were Montana Aerospace (+17.8%), Sulzer (+12.8%) and Huber+Suhner (+7.9%). No material company specific news was published on Montana Aerospace, but defence and aerospace stocks started the year strongly, delivering double-digit returns across the sector. Sulzer management hinted at solid order developments in Q4 2025, confirming full-year guidance. Positive order momentum could continue into 2026, while profitability should improve further, supported by a higher contribution from the services business. Huber+Suhner benefited from strong market momentum around AI-related themes. In line with revised guidance, the company reported FY 2025 revenues down 3% yoy, however, revenues increased by 7.5% when excluding the one-off termination of a telecom contract in India. Q4 order intake rose by 14.5%, driven by continued strong momentum in the industrial segment.

Despite the challenging geopolitical news flow in the first weeks of 2026, SMID caps proved resilient and started the year on a strong note. In the aftermath of the Greenland controversy, we expect more European inner political cohesion, as well as increased awareness regarding the need faster decision-making processes. Defence and infrastructure companies should continue to benefit, as a higher proportion of spend should go to European companies and technologies with the aim of reducing US dependency. This “Buy European” consciousness should be extended to EWR and EFTA countries such as Switzerland, supporting overall competitiveness. We enter 2026 with a well-diversified portfolio of high-quality companies offering idiosyncratic opportunities and we see excellent prospects for Swiss SMID capsto outperform.