Daniele Scilingo, head of Swiss equities at Mirabaud Asset Management, says the label 'Swiss equities' is misleading because many companies listed on the SIX are global market leaders that happen to be headquartered in Switzerland. He does not see Switzerland's record of producing niche champions as accidental, citing a strong currency, good universities, qualified workers and a demanding business environment that pushed firms to compete internationally. For that reason, he rejects the common view of the Swiss market as merely a defensive haven and says diversity is much greater below the three heavyweight names Nestle, Novartis and Roche.
Scilingo identifies five themes that will shape opportunities and risks. On artificial intelligence, he says the technology will fundamentally change the economy, but doubts that current share prices always reflect that. Swiss industrial companies are already benefiting: Sika supplies data-center solutions, and highly specialized Swiss machine builders are winning additional orders. He is more skeptical about valuations at Swiss semiconductor suppliers such as VAT, Comet and Inficon, where classic valuation models can be difficult to apply. Current prices, he says, assume a sustained supercycle with high growth and no typical semiconductor downturn. If investors believe that, the shares may be attractive, but with about 30 years of equity-market experience he is more cautious.
His historical comparison is that railways, computers, telecommunications and the internet transformed the world, yet not every company associated with those technologies made lasting money. He therefore expects a correction in AI-related stocks, although he does not know when it will come. The current move could last three months or two years. At the same time, he sees major productivity potential from AI and draws a distinction between the technology becoming an economic revolution and every AI stock being a good investment.
Scilingo says Mirabaud is looking for opportunities where investors are leaving stocks behind. The firm favors compounders: companies that grow over long periods, maintain high margins, generate high returns on capital and sustain that performance over years. Straumann is a key example. The dental-implant maker has delivered growth and high profitability over decades, and short-term pressures such as China pricing policy or currency moves do not necessarily change the long-term quality of the business model. Sonova is another case. Hearing aids may no longer be a spectacular innovation story, but demographic trends continue to support structural demand, and the company generates significant cash flows.
He also sees opportunities in the food sector, which has been less favored. Lindt & Sprüngli is described as a classic compounder that is being viewed more skeptically after negative volume development following strong price increases. Nestle is seen as undervalued after share-price setbacks. The key question, he says, is whether management can show in coming quarters that higher marketing investment strengthens brands and accelerates organic growth. His broader investment thesis is that when a temporary growth problem is priced by the market as structural decline, quality companies can offer attractive entry points.
China is one of the largest structural challenges, Scilingo says. He argues that the West must abandon the idea that innovation happens in the West while China is only a low-cost production base. China is becoming an innovation center in several industries, including electric vehicles, pharma and industrial products. Chinese companies can sometimes bring products to market faster and at significantly lower cost. Swiss companies therefore need to bring research, development and production closer to their sales markets. To succeed in China, they must also innovate there and develop products specifically for Chinese customers. Roche and Straumann are already moving in that direction.
Scilingo also says Swiss industry must rethink its traditional premium-quality model. Swiss engineers have long worked on a principle of either Rolls-Royce quality or nothing, but many customers do not need a Rolls-Royce. The challenge is to offer simplified and cheaper product variants without giving up quality standards. Swissness remains a competitive advantage, but by itself it no longer justifies every price.
In pharma, the environment is becoming more demanding for Roche and Novartis. Scilingo says the central question is not only whether politics puts pressure on drug prices, but whether companies generate enough genuine innovation. If a company has a real product, he says, the price for that innovation can be paid. Price pressure is likely to increase for interchangeable me-too products. The trend toward more specialized therapies can help large Swiss pharma groups. Companies that develop highly effective drugs for clearly defined patient groups can continue to earn attractive prices, making the productivity of research spending a key factor.
Scilingo points to Roche, where CEO Thomas Schinecker has tightened pipeline criteria and cut a significant part of projects to focus capital on candidates with greater potential. Acquisitions and licensing agreements remain important, and a significant share of new drugs at large pharma groups now comes from external developers. He sees both Roche and Novartis as well positioned long term, with a slight qualitative edge for Roche, particularly because of its innovation culture. He also sees a need for action in European health systems. If innovative drugs in Europe remain permanently much cheaper than in the United States, that could, against the backdrop of the tariff dispute with the US, reduce the long-term attractiveness of the location for research and innovation.
In financials, UBS dominates the current discussion, Scilingo says. He points to the underestimated earning power of Swiss banks and considers part of the political debate over additional capital requirements to be misfocused. The central problem at Credit Suisse was not only a lack of capital, but the loss of trust and liquidity. He argues that losing trust can make capital insufficient if customers and counterparties withdraw liquidity.
