Assets under management
The banks in Switzerland had assets under management totalling CHF 8,830.3 bn (up 12.1%) at the end of 2021. This strong growth compared with 2020 reflects the markets’ recovery from the pandemic and is attributable first and foremost to an increase of around CHF 1,000 bn in securities holdings.
Assets under management for customers resident in Switzerland grew by CHF 414.5 bn in 2021, assets under management for foreign-domiciled customers by as much as CHF 537.2 bn. This resulted in strong growth of 12.1% in total assets under management at Swiss banks, driven mainly by a sharp increase of 14.3% in securities holdings. Since the latter make up around 90% of total assets under management, the downward trends in fiduciary liabilities and amounts due to customers excluding sight deposits had no impact on the overall result. The breakdown of custody account holdings by currency did not change relative to the prior year. The Swiss franc remained the dominant investment currency with a share of more than 50%. Assets under management have grown steadily overall since 2011.
Trends in 2021
Assets under management for domestic and foreign customers
Assets under management at banks in Switzerland grew sharply in 2021, rising by 12.1% to CHF 8,830.3 bn. Assets of both domestic and foreign customers rose, driven primarily by a sharp increase in securities holdings in customers’ custody accounts at banks.
Assets under management comprise securities holdings in bank custody accounts (CHF 7,937.8 bn), amounts due to customers excluding sight deposits (CHF 783.7 bn) and fiduciary liabilities (CHF 108.8 bn). Securities holdings were around CHF 993.8 bn higher year-on-year, mainly thanks to the highly positive market trends seen in 2021. Fiduciary liabilities, meanwhile, were down 10.8%, and amounts due to customers excluding sight deposits were down 3.6%. Securities holdings account for the largest share of assets under management by far, so their strong growth outweighed the negative trend in the other components. When the financial and economic crisis broke out in 2008, it caused a slump in assets under management. Securities holdings in bank custody accounts suffered particularly heavy losses as share prices plummeted. Assets under management have gradually recovered since 2011, rising from CHF 5,245 bn to CHF 8,830.3 bn in 2021. The proportion of assets under management attributable to foreign customers fell from 51% in 2011 to 47.4% in 2021. There are a number of reasons for this, the first being currency effects. Foreign customers hold a much higher proportion of their assets in euros and US dollars than domestic customers, but the percentages shown here are calculated in Swiss francs. The firming franc is causing assets held by foreign customers to lose value compared with those of their domestic counterparts. Another reason could be the introduction of more stringent requirements for bank customers in terms of tax compliance. Foreign customers have repatriated at least some of their assets in order to normalise their tax situation. Despite their declining share, foreign customers’ assets under management rose by CHF 537.2 bn or 14.7% over the same period. This latest trend could be due to higher share prices and the appreciation of the US dollar versus the Swiss franc. Switzerland remained the global leader in cross-border wealth management for private customers in 2021. Assets under management rose 10.9% year-on-year, to CHF 2,395.3 bn.
Figure 20
Figure 21
Securities holdings
Figure 22
Securities holdings account for the largest share of assets under management. The easing of COVID-19 measures and the central banks’ expansionary monetary policies pushed market prices higher in many parts of the world. resulting in a sharp increase of 14.3% in securities holdings.
Securities holdings in customers’ custody accounts rose sharply (by 14.3%) in 2021. This impressive growth compared with 2020 was due to the reduced impact of the pandemic on stock exchange prices as well as to the persistently strong Swiss franc. The SMI added 2,070 points or 20.3% over the year as a whole. It had already returned to its pre-pandemic level by April. The MSCI World Index also fared well, gaining 22.4%. As the year progressed, the franc gained 3.6% against the euro but lost approximately 3.5% against the US dollar. Securities holdings are broken down into the categories “equities”, “units in collective investment schemes”, “bonds” and “other”. After only small changes in 2020, some categories posted strong growth in 2021. Equities performed best with a year-on-year rise of 20.8%, followed by units in collective investment schemes with 15.2%. Bonds, meanwhile, were more or less stable (down 0.6%). The increase in securities holdings is thus mainly attributable to the bullish stock markets. This also holds true in a longer-term comparison: overall, securities holdings have posted strong growth of 87.2% over the past decade. Since bond holdings remained constant during this time, the growth can be attributed to increased holdings of equities and units in collective investment schemes.
Custody account holdings by currency
The breakdown of custody account holdings by currency was stable relative to 2020, with more than half denominated in Swiss francs at the end of 2021. A quarter were in US dollars, the remaining quarter in euros and other currencies.
The proportion of holdings denominated in Swiss francs rose slightly from 52.5% to 53% in 2021, with the franc therefore remaining the leading investment currency in Switzerland. Only minimal changes were observed in the other currencies. The proportion held in US dollars, for example, fell by 0.3 of a percentage point year-on-year, while the proportion held in euros increased by 0.8 of a percentage point. Domestic custody account holders are responsible for around two thirds of holdings in Swiss francs but just one third of holdings in US dollars and euros, with foreign customers making up the remaining two thirds.
Figure 23
Assets under management down mid-year
Following a sharp rise in 2021, assets under management were down 4.4% in the first five months of 2022 due to a 5.5% drop in securities holdings, which was mainly caused by the negative trend on the stock markets.
The great uncertainty in the first few months of 2022 is reflected in assets under management at banks in Switzerland, which totalled CHF 8,205 bn at the end of May, down 4.4% compared with the end of 2021. Both Swiss-domiciled and foreign-domiciled customers showed a decrease in the volume of their assets due to the negative stock market trend and the resulting fall of CHF 421.1 bn or 5.5% in securities holdings. This negative trend is reflected in the SMI, which shed as much as 20% in the first half of the year. Amounts due in respect of customer deposits grew by CHF 25.5 bn or 3.3% in the first five months of the year. This growth was driven by amounts due to foreign customers, which rose by 17.7%. Fiduciary liabilities were up CHF 17.7 bn or 16.8%, but this had little impact as they only account for 1.5% of total assets under management.