Meridian Capital — Annual Report · 2025 03 / 15
Market Review
The year through an allocator’s eyes
2025 began generously and ended well, but it did not travel in a straight line. Global equities rose strongly through the first half on resilient earnings and the prospect of easier policy. The third quarter interrupted the advance: a sudden hardening of trade policy in August drove the sharpest drawdown of the year and a spike in volatility that lasted into September.
Central banks moved the other way. The European Central Bank and the Swiss National Bank cut rates through the year, supporting bond prices and pulling cash yields towards zero. For franc-based investors, the persistent strength of the currency was the quieter story: it subtracted two to three percentage points from unhedged foreign returns and made currency policy — not stock selection — the single largest decision of the year for many portfolios.
Two paths through 2025
Global equities and global bonds in franc terms, indexed to 100 at end-2024.
Asset-class returns 2025
| Asset class | Total return 2025 (CHF) | In brief |
|---|---|---|
| Global equities | +13.2% | Strong first half; the Q3 drawdown was recovered by November |
| European equities | +9.8% | Rate cuts supported valuations from spring onwards |
| Swiss equities | +7.4% | Defensive index; the strong franc weighed on exporters |
| Global bonds (CHF hedged) | +2.6% | Duration was rewarded as policy rates fell |
| CHF cash | +0.8% | Yields drifted towards zero as the SNB cut |
| Gold (CHF) | +11.5% | Sought after in the August volatility spike |
| Balanced reference portfolio | +6.9% | Net of fees in CHF |
“The third quarter told us nothing new about the companies we own. It told us a great deal about the people who were selling them.”