This week on SwissBliss, the podcast of Swissquote with Olga Miler, Obermatt’s Hermann Stern, Jr discussed an often overlooked segment: small and mid cap stocks in Switzerland’s SPI. While many investors focus on the big players, Hermann highlighted the unique advantages these smaller companies offer.
One of the key takeaways was the potential for these companies to be undervalued. Because they receive less attention from analysts, dedicated investors can uncover hidden gems with significant growth potential. Hermann emphasized that small and mid caps are often the true drivers of innovation in the Swiss economy. Their agility allows them to adapt quickly to market changes and seize new opportunities. Historically, this translates to higher returns compared to large caps, though it's important to remember that higher returns often come with increased volatility.
To mitigate this risk, diversification is important. Spreading investments across a range of small and mid cap stocks can help balance out the potential for volatility. Hermann advised against trying to time the market, emphasizing the importance of long-term investment in companies with strong fundamentals.
The Top 10 stocks in the SPI don’t only include small and mid cap stocks. Have a look at the two larger companies that made their way up to the Top 10.
- Banque Cantonale de Genève: A stable and reliable cantonal bank with a strong focus on the Geneva region. Offers a wide range of financial products and services for individuals and businesses.
- Jungfraubahn: Operates the famous railway line to the Jungfraujoch, a popular tourist destination in the Swiss Alps. A classic consumer discretionary stock with a unique appeal, but susceptible to tourism trends.
- CPH Holding: CPH Holdings is a Swiss industrial group specializing in niche chemical production, paper manufacturing, and pharmaceutical packaging, with a history dating back over 200 years.
- Romandie Energie: A leading provider of renewable energy in western Switzerland. Well-positioned to benefit from the growing demand for clean energy, but faces regulatory and competitive risks.
- ALSO: A Swiss tech distributor connecting IT vendors with resellers across Europe. They focus on hardware, software, cloud services, and cybersecurity solutions, playing a key role in digital transformation.
- Mikron: Specializes in the manufacturing of high-precision machining systems and automation solutions. A play on industrial automation and manufacturing trends, but can be cyclical.
- VZ: An independent financial services provider offering wealth management, asset management, and banking services. Appeals to investors seeking exposure to the financial sector with a focus on individual clients.
- DKSH: Provides market expansion services, helping companies to grow their businesses in Asia and other emerging markets. Offers exposure to global trade and emerging markets, but carries inherent risks in those areas.
- Basellandschaftliche Kantonalbank: Another solid cantonal bank, this one focused on the Basel-Landschaft region. Known for its stability and conservative approach, similar to Banque Cantonale de Genève.
- Ascom: Develops and provides communication solutions for the healthcare, industry, and security sectors. A niche player in a growing market, but faces competition from larger technology companies.
Visit the Markets section in your user account in the Obermatt Login area to customize your preferences and the Top 10 lists you want to receive according to this schedule.