For several years, financial markets have become accustomed to operating in an environment of historically low interest rates. Many expected this trend to return quickly as inflation eased.
However, the outlook is evolving differently.
As Daniel Varela, Chief Investment Officer at Piguet Galland, explains, central banks are now adopting a more cautious stance in response to geopolitical risks, rising energy prices and the growing financing needs of the global economy.
Beyond recent events, several long-term structural trends are reshaping the balance of global markets.
Governments must finance the energy transition, infrastructure development and increased defence spending. At the same time, massive investments in artificial intelligence infrastructure are requiring unprecedented levels of capital.
In this context, the cost of capital is gradually returning to a higher level.
As Daniel Varela summarises:
"We are moving from an environment of abundant, low-cost capital to one where savings are scarcer and more expensive."
Switzerland nevertheless benefits from strong economic fundamentals. Low inflation, limited public debt and the substantial savings held by households and pension funds help reduce the risk of a significant rise in domestic interest rates.
This gives the Swiss National Bank greater flexibility than many other central banks.
This new environment also creates fresh opportunities.
High-quality bonds are regaining the appeal they gradually lost during the era of ultra-low interest rates. Today, they offer more attractive real returns across several international markets and can once again play an important role in portfolio diversification.
At the same time, careful issuer selection has become more important than ever, as risk premiums on lower-quality bonds remain particularly tight.
The return of sustainably positive real interest rates marks a new chapter for financial markets.
In this environment, building a balanced, diversified portfolio tailored to each investor's objectives once again becomes an essential element of long-term wealth management.
Read the full article (french only)