Breaking down FX trends: What’s next for Swiss funds?

Switzerland is more than just breathtaking alpine views and luxury watches—it’s a financial powerhouse with a unique flair for attracting investors. Known for its stability, the Swiss franc (CHF) has earned a reputation as a safe haven during shaky global times. But even the Swiss economy isn’t immune to volatility, as proved in 2024.

The Swiss National Bank (SNB) turned heads early in the year when it became the first major economy to cut rates. In March, the SNB trimmed its policy rate by 25 basis points to 1.5%, despite inflation being under control. By December, the SNB doubled down with a , aiming to boost the economy further—a move bound to spark debate.

So, how are Swiss fund managers navigating this shifting monetary landscape? Our newdives into the innovative strategies they’re using to hedge against market uncertainty. From adapting to economic changes to cutting back on outdated manual processes that devoured time and resources in 2023.

Curious? Let’s take a closer look at the Swiss FX landscape.

 

From hesitation to adoption: The evolution of hedging strategies

In 2023 94% of Swiss fund managers took proactive steps to hedge against forecastable currency risk, even those who initially chose not to, began reconsidering their stance. Fast forward to 2024, and every single respondent had embraced hedging strategies. Let’s dig deeper…

The hedge game is changing, and fund managers are stepping up their strategy. In 2024, Swiss fund managers made a powerful pivot, adopting long hedge strategies that had previously been shunned. 7 in 10 now hedge 51-75% of their exposure—a striking move that echoes the 78% who hinted at ramping up hedge ratios back in 2023.

In 2024, a whopping 70% of fund managers were locking in hedges 4-6 months ahead—a dramatic leap from just 16% the year before, when most played it safe with shorter 1-3 month windows. Now? They're looking even further ahead, with another bold 70% gearing up to extend their hedge durations even more.

Is this confidence in the face of uncertainty or calculated caution? Either way, it’s a shift that speaks volumes. Fund managers are moving beyond avoiding market volatility, focusing on smarter hedging strategies and preparing to navigate the unpredictable financial landscape.

 

When markets tremble: How the Credit Suisse collapse reshaped liquidity

The 2023 Credit Suisse collapse sent shockwaves through global markets, prompting Swiss regulators to strengthen liquidity rules to safeguard financial stability. Authorities tightened oversight and introduced enhanced capital requirements, taking effect in 2024. One standout move? Switzerland's financial regulator FINMA, now has the authority to hit banks with custom surcharges, ensuring they meet higher liquidity standards. Unsurprisingly, 70% of fund managers reported in 2024, credit providers had clamped down on lending criteria, making funding harder to secure.

50% of fund managers reported credit providers are slashing fees despite liquidity challenges. With lower interest rates comes fierce competition, consequently banks are likely cutting lending costs for those deemed creditworthy borrowers. A tale of two strategies.

 

Saving time: Automating the chaos of manual processes

Manual processes have long been the arch-nemesis of fund managers—tedious, time-draining, and a serious manpower hog. In 2023, a staggering 84% of fund managers admitted to spending 2-3 days wrestling with FX tasks, and an unlucky 13% were stuck dealing it for as long as 4-5 workdays. With groundbreaking tech available to slash this workload, why are so many fund managers still stuck in the pit of manual processes?

It turns out that manual processes are not only still troubling many fund managers but are also becoming more widespread. 60% of Swiss fund managers now cite manual challenges as their biggest obstacle, a significant jump from 38% in 2023. But there’s hope on the horizon. The tide is turning, with 6 in 10 fund managers now embracing APIs to handle FX transactions. What’s driving this shift? The new T+1 settlement cycle might just be the nudge fund managers needed to finally upgrade their technology, with 60% upgrading to meet the reduced settlement demand.

The message is clear: the days of clunky, time-wasting processes are numbered. As technology sweeps through the industry, Swiss fund managers are starting to trade their old habits for faster, smarter solutions.

Half of asset managers surveyed are now outsourcing their FX operations to enhance , whilst 7 in 10 are now considering automating trade execution and risk identification. Only time will tell, who’s prepared to embrace this wave of change—and who’ll get left behind?

 

 

This blog examines the data and results of surveys by Censuswide on MillTechFX’s behalf conducted in November 2023 and December 24-January 25 based on surveys of 250 (2023) and 252 (2024) CFO’s, treasurers and senior finance decision-makers at mid-size asset management firms in Europe, described as those with assets under management ranging from €500m to €20b (2023) and €46 Million - €20 Billion+ (2025).

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