The Swiss model can be a source of inspiration from multiple angles for developed nations. Instead of relying on currency devaluation to boost manufacturing, Switzerland has focused on quality, resilience, and advanced industries, which has supported a robust economy that is not only often resistant to external shocks, but also anchored by low public debt as a percentage of GDP.
Strong currency, strong exports: rethinking competitiveness
Switzerland disproves the myth that a strong currency undermines competitiveness: despite the Swiss franc being one of the strongest currencies for several decades, Switzerland maintains a high-performing export economy, with manufacturing making up around 18% of GDP and exports representing 75% of GDP.
Currency Rates CHF vs. EUR and USD
Exports of goods and services as % of GDP
R&D, SMEs and the Swiss innovation engine
Quality, innovation, and economic stability come together to form Switzerland’s competitive edge. The country leads in research & development (R&D) spending as a percentage of sales, and it is well-positioned in innovation rankings, despite only having a modest exposure to the tech sector, driven by investments in education and a decentralised economy dominated by globally competitive companies, both large and small.
R&D as % of sales
Competing through strength, not devaluation
The Swiss model presents a compelling blueprint for advanced economies: instead of pursuing currency devaluation, Switzerland has emphasised innovation, robustness and high-value-added sectors. This approach has led to a stable, resilient economy with low public debt and strong global competitiveness.
Gross public debt as % of GDP
As a result, the Swiss equity market is highly value-creative as measured by its average Cash Flow Return on Investment over the cost of capital (CFROI, source: UBS Holt) and it outperforms the global equity market as well as other regional markets over the long term, and all this is achieved with lower volatility.
UBP’s Swiss equity strategies: robust positioning
Accessing the Swiss equity market with an active management approach becomes an advantage, enabling portfolios to stay agile, lean into resilience, and strategically allocate to areas of strength as they emerge.
For instance, considering the recent tariff discussions, this could mean emphasising companies with limited or no exposure to the US or those operating with a ‘local-for-local’ model. Similarly, it includes selectively adding names which are poised to potentially benefit from Germany’s infrastructure, climate protection, and green transformation spending plans.
UBP’s Swiss equity strategies are well positioned to capitalise on these dynamics. While focusing on companies with robust fundamentals, strong pricing power, and disciplined capital allocations, they are actively leveraging shifts in global economic conditions, allowing the strategy to be well positioned for potential upside capture in targeted pockets of growth, without compromising on quality or resilience.
The views and opinions expressed by fund managers (internal or external) may differ from the house view. They are shared for informational purposes and do not constitute investment advice or a recommendation.
