The Swiss Franc Turns 175: A Safe Haven to the Dollar in Uncertain Times?

In 2025, the Swiss franc will celebrate its 175th anniversary , confirming its position as one of the most solid and reliable currencies in the world. In the current market environment characterized by volatility, persistent inflation and geopolitical tensions, the franc has confirmed its role as a safe haven , while traditional “safe havens” such as the dollar and US Treasuries have shown their full vulnerability. This year, the Swiss currency has gained more than 10% against the US dollar , bringing the exchange rate to levels rarely seen since the Swiss central bank intervened in the currency market in 2011. The strengthening has not only affected the dollar: even against a basket of currencies, the franc is approaching record levels.

Thanks to Switzerland's political and institutional stability, the prudence of the Swiss National Bank and solid macroeconomic fundamentals (low inflation compared to other developed economies and a structurally positive balance of payments), the franc offers protection in times of turbulence , while tending to strengthen in periods of risk aversion. It is therefore a strategic lever to strengthen the resilience of portfolios. For risk-averse investors, an allocation to Swiss francs can provide protection during periods of volatility and, for those with portfolios concentrated in euros or dollars, exposure to the Swiss franc can help offset currency risk.

However, caution should be exercised regarding the relative strength of the franc: if it appreciates too much, returns on Swiss assets could be affected in real terms or the strengthening of the currency could weigh on Swiss exports, negatively impacting the activity of some Swiss companies. The Swiss franc can be an interesting defensive element in the portfolio and active management, integrating multi-asset solutions and dynamic currency strategies, can offer a more efficient approach to including this currency in the portfolio.

*I.e. Vontobel Wealth Management Sim