Assets under management
Assets under management at banks in Switzerland rose by 6.9% year-on-year in 2023, to CHF 8,391.7 bn. This reflects both increased enthusiasm for bonds and the recovery of the equity markets. However, the record-high figure seen in 2021 remained out of reach.
Assets under management for customers resident in Switzerland rose by CHF 395.1 bn in 2023, those of foreign-domiciled customers by CHF 149.8 bn. This led to solid growth of 6.9% in total assets under management at Swiss banks, driven mainly by the recovery in securities holdings, which were up 5.2%, recouping around a third of the loss seen in 2022. Securities holdings account for the bulk of assets under management, at around 86%. Smaller items, such as fiduciary liabilities and amounts due to customers excluding deposits, also rose in 2023, up 10.7% and 20.4% respectively. The breakdown of custody account holdings by currency was unchanged from a year earlier. The Swiss franc remained the dominant investment currency with a share of more than 50%. Overall, assets under management rose progressively after 2013 before experiencing a decline in 2022, half of which was then made up in 2023.
TRENDS IN 2024
Marked rise in assets under management in first half of 2024
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Trends in 2023
Assets under management for domestic and foreign customers
Assets under management at banks in Switzerland grew by 6.9% in 2023, to CHF 8,391.7 bn. Assets of both domestic and foreign customers rose, with around two thirds of the increase accounted for by growth in their securities holdings in bank custody accounts.
Assets under management comprise securities holdings in bank custody accounts (CHF 7,195.4 bn), amounts due to customers excluding sight deposits (CHF 972.7 bn), and fiduciary liabilities (CHF 223.6 bn). Securities holdings grew by around CHF 358.3 bn year-on-year, mainly thanks to renewed enthusiasm for bonds and the recovery of the equity markets. The SMI gained some 4% in 2023, after shedding 17% in 2022. Amounts due to customers excluding sight deposits also saw marked growth, as did fiduciary deposits, their totals rising by 20.4% and 10.7% respectively. Securities holdings make up by far the largest component of assets under management, at around 86%, and were also the biggest driver of growth in 2023. Looking back over the longer term, assets under management at banks in Switzerland have grown substantially overall. They dropped sharply in the wake of the 2008 financial and economic crisis, with securities holdings in bank custody accounts especially hard hit as share prices plummeted. Between 2013 and 2021, however, assets under management clawed their way back from CHF 6,138.0 bn to CHF 8,833.2 bn, before dropping to CHF 7,846.8 bn in 2022 as a consequence of the negative market performance. However, the growing appeal of bonds due to higher interest rates and the stock market recovery in 2023 meant that half of these losses were recouped in 2023, pushing assets under management back up to CHF 8,391.7 bn. The standout feature over the longer-term perspective is the fall in the proportion of assets belonging to foreign-domiciled customers, from 51.3% in 2013 to 45.2% in 2023. There are a number of reasons for this, chief among them the currency effect. Foreign customers hold a much higher proportion of their assets in euros and US dollars than their domestic counterparts. Since asset shares are calculated in Swiss francs, the assets of foreign customers decline relative to those of Swiss-based customers if the franc strengthens. Despite their shrinking share, foreign customers’ assets under management have risen by CHF 645.1 bn or 20.5% in absolute terms since 2013. Switzerland was still the world leader in cross-border wealth management for private clients in 2023, with holdings of CHF 2,205.7 bn, representing an increase of 4.8% compared to the previous year (adjusted for exchange rates).
Figure 19
Figure 20
Securities holdings
Figure 21
Securities holdings account for the largest share of assets under management. Share prices rose sharply in 2023, especially in the tech indices, undeterred by the central banks’ monetary policy tightening in response to rising inflation, coupled with geopolitical risks. The combination of high interest rates and a bullish stock market boosted bond and equity holdings, leading to a 5.2% increase in securities holdings overall.
The main reason for the 5.2% rise in customers’ securities holdings in 2023 was the positive stock market trend, which defied high levels of global inflation, the central banks’ more restrictive monetary policy response, and ongoing geopolitical uncertainties. The SMI gained 408 points (4%) over the course of the year. Tech indices performed markedly better, with the Nasdaq-100 posting historically high growth of 53.8%. Technological innovations, notably in artificial intelligence, sent some tech stocks skyrocketing. Securities holdings are broken down into the “equities”, “units in collective investment schemes”, “bonds” and “other” categories. Rising share prices are partially mirrored in equity holdings, which rose by 4.1% in 2023 to CHF 2,776.6 bn, though this is still far short of the CHF 3,375.7 bn they achieved in the record-breaking year of 2021. Bonds recorded even higher growth, gaining CHF 146.1 bn (12.3%) year-on-year to CHF 1,331.3 bn. This corresponds to 40.1% of the total figure. Bonds have thus returned to favour in times of higher interest rates and insecurity, bucking the negative trend seen since 2019. Over the last decade, however, it is equities that have driven the performance of securities holdings. They added 33.4% between 2013 and 2023, while bonds managed just 4.2%. Today, equity holdings account for the largest portion of securities holdings, at 38.6%. Like bonds, the Swiss franc was also back in demand in 2023, appreciating strongly over the course of the year to gain 5.7% against the euro and 9.9% against the US dollar. This trend underscores the franc’s role as a safe haven in times of global uncertainty and higher inflation.
Custody account holdings by currency
The breakdown of custody account holdings by currency was stable relative to 2022, with more than half denominated in Swiss francs at the end of 2023. One quarter were in US dollars, with the euro and other currencies accounting for somewhat less than 20% between them.
The Swiss franc share of securities holdings in customer accounts rose slightly in 2023, to 53.4%, maintaining its position as the most important investment currency. Only minor changes were observed in the other currencies: the US dollar share rose by 0.2 percentage points year-on-year, while the euro remained stable. Around two thirds of the Swiss franc holdings were held by Swiss-based investors, while for both the dollar and the European single currency the reverse was true, with roughly two thirds being foreign-held in each case.
Figure 22
Marked rise in assets under management in first half of 2024
Assets under management at banks in Switzerland rose by an impressive 8.0% in the first months of 2024, exceeding CHF 9,000 bn for the first time in mid-year. This was largely due to positive developments in equities, which were the main factor in the 7.7% rise in securities holdings.
Declining inflationary pressure and the recovery of the equity markets in the first months of 2024 were also reflected in assets under management at banks in Switzerland, which rose by 8.0% to top CHF 9,000 bn for the first time at the end of May. The assets of both Swiss-domiciled and foreign-domiciled customers have risen sharply thanks to the upbeat stock market trend and the resulting expansion of securities holdings, which rose by CHF 555 bn or 7.7%. Amounts due to customers excluding sight deposits were up CHF 94 bn or 9.5% in the first months of 2024. The increase was driven by domestic customers (up CHF 78 bn or 10.8%), with slightly weaker growth of CHF 16 bn or 5.9% for foreign customers. Fiduciary liabilities, meanwhile, rose by CHF 20 bn or 9.0%. Assets under management posted further substantial growth following the completed takeover of Credit Suisse in 2023, assisted by positive market developments. This reflects the robustness of the Swiss banking centre and customers’ continuing trust in it.