findependent Market Report

Early summer brought encouraging news for you as an investor. Two developments took centre stage: the end of the intense fighting in the Middle East and the successful IPO of SpaceX, both of which drove significant movement in the financial markets.

Over the past three months, stock markets rebounded strongly. Gold, on the other hand, suffered a substantial decline, while Swiss real estate funds and Swiss franc bonds posted modest gains.

With the excitement surrounding SpaceX, the debate over blockbuster IPOs is back. Here’s our take: for you, nothing changes.

Review
Our main asset classes delivered the following returns over the past three months (in Swiss francs):

• Global equities: +17.8%
• Swiss equities: +12.2%
• Swiss real estate funds: +2.9%
• CHF corporate bonds: +0.7%
• Swiss government bonds (3–7 years): +0.4%
• Gold: -13.3%

Depending on your chosen investment strategy, your portfolio gained between 2.6% and 15.2% over the past quarter.

The world’s most powerful man (US President Donald Trump) and its richest (Elon Musk, SpaceX’s largest shareholder) both played a role in the positive performance of your investments.

In financial markets, political headlines rarely matter on their own. What matters is how they affect the economy. Following the temporary ceasefire in April and the recent declaration of intent between the US and Iran, tensions around the Persian Gulf eased noticeably. It also helped that both Washington and Tehran appeared increasingly reluctant to continue the conflict. From the market’s perspective, the logic is simple: as long as oil keeps flowing and the economy can continue operating, that’s good news.

The improved sentiment also reopened the window for IPOs, giving investors the opportunity to buy shares in companies that had previously been privately held. Then, on 12 June, SpaceX’s market debut shattered records – and many investors’ expectations.

We don’t usually comment on individual companies. This time, however, we’re making an exception to use SpaceX as an opportunity to discuss the return of mega IPOs.

What should you do now?

The short answer: nothing.

We recommend tuning out the noise from these two larger-than-life personalities. At best, their public appearances are entertaining. As a basis for investment decisions, however, they are of little use.

Example #1: Sharp-eyed observers noted that the US President announced the declaration of intent several times in the months leading up to its signing – more often than he changed his underwear.

Example #2: Rather than highlighting SpaceX’s current products, its largest shareholder preferred to promote grand visions of data centres in space and colonising Mars.

The return of these mega IPOs has sparked heated debate among market commentators. Some see them as a sign of excessive investor enthusiasm – a warning that more challenging months for the stock market may lie ahead.

We take a more measured view. There are no laws of nature that determine where markets go next, and unfortunately, we don’t own a crystal ball. What financial history does show, however, is that companies tend to go public when their existing owners believe they can achieve a particularly attractive valuation. That alone calls for some caution, especially given that newly listed companies have historically underperformed in their first few years on the stock market.¹

Why you don’t need to worry

As a findependent client, IPOs have very little impact on you. Normally, it takes some time before a new stock is included in a benchmark index, and even then it starts with a minimal weighting thanks to the broad diversification of that index.

In the case of SpaceX, things moved faster due to an exceptional rule (its inclusion in ETFs is already taking place by the end of June), but its weight in our investment solutions remains tiny: it ranges between 0.01% (strategy «Careful») and 0.06% («Risky»). Even if the share of freely tradable stock increases by the end of the year, and assuming stable prices, SpaceX is expected to make up only around 0.6% of your «Risky» investment solution. That’s not even enough to make it into the top 20 holdings.

The ups and downs of individual high-profile stocks won’t determine your long-term investment success. That’s the beauty of broad diversification.

Outlook

We don’t make predictions.

Our approach remains as simple as ever: invest for the long term, stay broadly diversified, and keep costs low.