Silver gaining momentum
Precious metals surged in August, breaking key resistance levels (gold > USD 4,500). ETF flows are also picking up. We are adding silver to our portfolios as we see greater potential here compared to gold.
Asset Allocation Update: Silver on the Rise, USD Under Pressure
Interventions by the US Treasury in bond and currency markets have unsettled investors, causing volatility in bond markets. The USD is under pressure, while precious metals, especially silver, are gaining momentum. Meanwhile, high real yields on global government bonds and strong earnings growth in equities remain attractive. We are maintaining our portfolio strategy, albeit with some minor adjustments.
Dr Roger Rüegg
What adjustments have we made to the portfolios?
Bonds: US Treasury Interventions Trigger Nervousness
In August, the US Treasury took an activist stance: first, it supported the yen in collaboration with the Bank of Japan, then announced increased buybacks of long-term US Treasuries. These measures aimed to flatten the yield curve and reduce the US government's interest burden. However, both effects quickly faded, reflecting a sense of nervousness. Consequently, the USD has lost around 3%, while "safe-haven assets" like precious metals and cryptocurrencies have surged. This indicates that investors are losing confidence in the USD or seeking hedges.
We believe the significant rise in US Treasury yields is not primarily driven by inflation or debt concerns, as inflation expectations remain anchored. Moreover, yields have risen sharply even in countries with lower debt levels. This suggests a global interest rate phenomenon rather than a US-specific issue.
However, as the yield on the 30-year US Treasury bond has broken higher, we are reducing risk in this area and shifting our focus to Australia. Overall, we continue to find government bonds attractive at current high real yields and remain overweight.
Chart 1: US Yields Break Higher, Dollar Weakens
Equities: Mining Stocks on the Rise
The recovery in tech stocks we anticipated materialised in August and is likely to continue into September. We remain overweight in tech stocks and are adding to our emerging markets exposure. In addition to tech, we find banks and mining stocks particularly attractive, especially in Canada. As a result, we are increasing our exposure in Canada at the expense of small caps. Swiss equities remain expensive and defensive, so we are maintaining our underweight. We are neutral on European equities. While the economy is gaining momentum, the strong euro could weigh on earnings, and European banks, after a spectacular run (over 200% in three years), now appear overbought and expensive.
Alternative Investments and FX: De-Dollarisation Gains Momentum
We are now initiating an overweight position in precious metals, with silver showing even greater potential than gold. De-dollarisation appears to be gaining momentum once again, prompting us to reduce the US dollar allocation in the portfolio while increasing exposure to the Australian dollar and the euro.
Out Tactical Asset Allocation in EUR in September 2026
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