As a Swiss based investor, it’s easy to focus primarily on domestic markets and the strength of the Swiss franc. However, developments in the U.S. Treasury market and currency fluctuations can have significant implications for your portfolio. Here’s why staying informed about these factors is crucial.
Understanding U.S. Long-Dated Treasuries
The U.S. 30-year Treasury bond yield has experienced notable volatility over the past decade. As of May 19, 2025, the yield stands at 4.92%. Such movements can influence global interest rates and investor sentiment, affecting asset valuations worldwide.
Source – TradingEconomics.com
At a time when yields on government bonds are rising, there can be major implications for Swiss Investors
- Global Interest Rate Influence: Rising U.S. Treasury yields can lead to higher global interest rates, impacting the cost of borrowing and the valuation of fixed-income assets in Switzerland.
- Currency Fluctuations: Changes in U.S. interest rates can strengthen or weaken the U.S. dollar, influencing the Swiss franc’s exchange rate. A stronger franc can affect Swiss exporters’ competitiveness and impact the returns of foreign investments when converted back to CHF.
- Investment Diversification: Understanding U.S. market dynamics can help in making informed decisions about diversifying investments internationally, balancing risk and return effectively.
The Liberation Day tariffs have caused extreme volatility in financial assets worldwide. They have also caused a drop in the value of the US dollar against a basket of currencies, especially against the Swiss Franc, which is up 9% year to date against the Dollar.
Slow bleed of support out of the US markets
Rebecca Patterson, who previously served as Bridgewater’s chief investment strategist has recently compared the loss to a –
‘slow bleed of support out of the US markets’.
The U.S. equity market (S&P 500) accounts for circa 60% of global equity market capitalisation, and U.S. bonds make up 35–40% of the Bloomberg Global Aggregate Bond Index. This will therefore be reflected in most portfolios, not least because it was just 6 months ago when the world was talking about US exceptionalism, at the end of a year when US stocks posted double digit gains twice those of most developed markets.
The world today looks very different.
As Lenin once said, “there are weeks when decades happen, and decades when weeks happen.”
Impact on Swiss residents
If you are Swiss resident, with the Swiss franc as your base currency, you should consider carefully what allocation you have to other currencies, especially the US dollar. This has always been the case of course, however as the impact of tariffs on US companies increases, the risk from a local Swiss perspective is now at elevated levels.
If, however, the US dollar is your long-term base currency, then consider alternatives such as an investment in gold.
Source – goldprice.org
Gold typically outperforms in times of high inflation, and market volatility.
Expert Advice
As global markets become increasingly interconnected, staying informed about international developments is essential. Regularly reviewing your investment portfolio in the context of global economic indicators, such as U.S. Treasury yields and currency movements, can help in making strategic decisions to safeguard and grow your wealth.
At times such as these, having a well-defined financial plan, with clearly established objectives and risk tolerance helps you stay focused, disciplined, and less reactive to short-term market swings. It can help you to understand what to do (and just as importantly what not to do) even when things feel uncertain.
At Blackden Financial we are a firm of Swiss licensed wealth managers and we have been advising our clients in Switzerland for the past two decades on just such matters. If you feel you may need advice now on how these potentially significant changes may affect you, we suggest you book a no obligation ‘discovery’ call. There is no commitment and no cost.
Contact us on +41 22 755 0800, email info@blackdenfinancial.com or complete our Contact Form here
One of our team will contact you and arrange a suitable time to discuss whether our service may be suitable for your situation and if so how best to proceed, step by step.