Bellevue Entrepreneur Swiss Small & Mid

Swiss SMID Caps as measured by the SPIEX Index increased by 2.8% in the month (SMI +3.1%). Markets extended their recovery, supported by a solid Q1 2026 earnings season and growing optimism around a potential de-escalation of the Iran conflict, though a resolution continues to prove elusive. Inflation remained a key focus, with headline inflation running at 3.0% in the Euro area and 3.8% in the US, triggering a breakout in government bond yields across maturities. Against this backdrop, central banks on both sides of the Atlantic held rates steady, though with an increasingly hawkish bias as the risk of entrenched supply-side inflation continues to linger. The Eurozone Composite PMI eased further to 48.5 in May, as weakness in services (47.7) offset continued resilience in manufacturing (51.6), which expanded for a fourth consecutive month. In Switzerland, the procure.ch Manufacturing PMI jumped to 57.3 in May from 54.5 in the previous month, exceeding market expectations of 54. It marked the highest reading since July 2022, driven by stronger expansion in both production (up 5.0 ppt to 57.3) and order books (up 3.3 ppt to 59.4). From a sector perspective Consumer Discretionary (+19.5%), Information Technology (+13.7%), and Health Care (+6.2%) performed best while Utilities (-4.6%), Real Estate (-3.2%) and Consumer Staples (-2.2%) lagged the most.

Against this backdrop, the Fund (B-share, CHF) increased 4.1%, outperforming the benchmark by 130 bps.Yt-Mai End the Fund is up 5.7%, 25 bps above its benchmark.

Main detractors in the month were Compagnie Financiere Tradition (-8.7%), Lindt (-5.4%) and Temenos (-8.7%). Tradition corrected on no news. The broker published its Q1 2026 trading update on April 30 with strong revenue growth of 18.5% in lc (6.6% in CHF). Despite the hefty negative fx effect, these were strong numbers and CFT should continue to benefit from a positive trading momentum across all asset classes. The company recently announced the roll-over of its buyback program starting June 2. Lindt’s volume growth remains under pressure and revenue growth continues to be driven primarily by pricing, taking a toll on the share price performance. In addition, higher interest rates weighed on the valuation of long-duration consumer staples, leading to further multiple compression. Temenos suffered from AI rotation out of Software into Semis, with investors ignoring for now consensus upgrades supported by encouraging recent results and Temenos defensible position stemming from deep entrenchment at the intersection of stringent regulatory burden and high technical complexity.

Top 3 contributors were Huber+Suhner (+17.7%), Tecan (+32.0%) and Belimo (+16.0%). Huber+Suhner maintained its strong upward trajectory, driven by the accelerating AI infrastructure build-out. Polatis business is emerging as a key enabler of next-generation optical data centre architectures, placing it at the heart of a rapidly expanding investment theme. Tecan reported a solid Q1 2026 trading update, with organic revenue growth of 3.4% and order intake increasing 6.7%. The company also reaffirmed its full-year guidance for low-single-digit growth, which appears conservative given the stronger order momentum. Belimo benefitted from a positive broker initiation. The HVAC specialist generates 20% of its revenues in DC liquid cooling, a segment commanding above average growth in the dynamic field of AI infrastructure.

YTD, the SMID performance has held up vs Large in most regions. Also in Switzerland, SMID caps have not underperformed Large since the start of the Iran war against what most would have expected. This is the result of tech and AI displacements trumping oil and inflation fears. The bottlenecks of AI are physical: data centres, land, water, grid access, power, memory, cooling etc. SMID Indexes own a great amount of tech and engineering companies benefitting as suppliers into the fast developing AI infrastructure ecosystem. During the month we trimmed some of our AI related names, taking profit, adding exposure to Avolta, Gurit and Tecan.