Assets under management

The banks in Switzerland had assets under management totalling CHF 7,878.7 bn at the end of 2020. Switzerland is still the global market leader in cross-border private banking, accounting for a quarter of all cross-border assets under management worldwide.

Assets under management for customers resident in Switzerland grew by CHF 93.2 bn. The assets under management of foreign-domiciled clients decreased by CHF 108.0 bn. Overall, the Swiss banks’ volume of managed assets remains at the previous year’s level (–0.2%). The increase in securities holdings was not enough to compensate for the decline in fiduciary liabilities and amounts due to customers excluding sight deposits.

The breakdown of custody account holdings by currency was unchanged compared with 2019. The Swiss franc remained the dominant investment currency with a share of more than 50%. Assets under management have grown steadily since 2011.

Trends in 2021

Assets under management up after first half year

Trends in 2020

Assets under management for domestic and foreign customers

In 2020, assets managed by banks in Switzerland remain at the previous year’s level (–0.2 %). Foreign client assets have declined. The growth in domestic client assets almost compensated for this downward trend.

Assets under management comprise securities holdings in bank custody accounts (CHF 6,944.0 bn), amounts due to customers excluding sight deposits (CHF 812.6 bn) and fiduciary liabilities (CHF 122.1 bn). Securities holdings were around CHF 163 bn higher year-on-year.

Fiduciary liabilities were down 38.0%, and amounts due to customers excluding sight deposits were down 11.3%. Securities holdings account for the largest share of assets under management by far, but their growth was not strong enough to compensate for 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 by CHF 2,633.6 bn to CHF 7,878.7 bn in 2020.

The proportion of assets under manage­ment attributable to foreign customers fell from 51.9% in 2010 to 46.3% in 2020. 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. An appreciating franc means that assets held by foreign customers automatically 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 compared with domestic customers, foreign customers’ assets under manage­ment rose by CHF 807.1 bn over the same ten-year period.

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Fig. 18

Securities holdings

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Securities holdings account for the largest share of assets under management. The COVID-19 pandemic caused the stock markets to collapse in early 2020, but they stabilised by the end of the year, resulting in an increase of 2.4% in securities holdings despite the crisis.

Securities holdings in customers’ custody accounts rose slightly (by 2.4%) in 2020. This moderate figure compared with 2019 was due to the impact of the COVID-19 pandemic on stock exchange prices and the persistently strong Swiss franc. The SMI initially slumped from more than 11,000 points to around 8,160 in March 2020. This was followed by a rapid recovery that lifted the index back above the 10,000-point mark in June, although it was unable to return to pre-pandemic levels by the end of the year. As the year progressed, the franc gained 0.2% against the euro and approximately 8.9% against the US dollar.

Securities holdings are broken down into the categories “equities”, “units in collective investment schemes”, “bonds” and “other”. Following strong growth in all of these in 2019, there were only minor changes in 2020. Units in collective investment schemes recorded the largest increase (5.8%), whereas bonds showed a fall of 4.4%.

Overall, securities holdings have posted strong growth in excess of 50% 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 unchanged compared with 2019, with more than half denominated in Swiss francs. A quarter were in US dollars, the remaining quarter in euros and other currencies.

The proportion of holdings denominated in Swiss francs fell slightly from 52.5% to 52.4% in 2020, but the franc remains the leading investment currency in Switzerland. Only minimal changes were observed in the other currencies. The proportions held in US dollars and euros, for example, both increased by 0.1 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.

Fig. 20

Assets under management up after first half year

Following a slight fall in 2020, assets under management rebounded by 6.9% in the first five months of 2021 due to strong growth of 8.2% in securities holdings, which was driven by the positive trend on the stock markets.

The economic recovery from the pandemic in the first part of the year was also mirrored in assets under management. At the end of May, the banks in Switzerland had assets under management totalling CHF 8,386.9 bn, up 6.9% compared with the end of 2020. Both Swiss-domiciled and foreign-domiciled customers showed an increase in the volume of their assets thanks to the upbeat stock market trend and the resulting growth in securities holdings. The latter rose by 8.2%, while amounts due to customers and fiduciary liabilities continued their downward trend from last year. The positive trend on the stock markets was reflected in the SMI, which reached a new high of around 12,000 points in June.