Swiss Equities: 8% a year — for 100 years

"Unus pro omnibus, omnes pro uno"

– The unofficial motto of Switzerland: one for all, all for one

CHF 1,743,563.

That is what CHF 1,000 became if you invested it in Swiss equities at the end of 1925 — and then did the hardest thing in investing.

Nothing.

For one hundred years.

No Big Tech. No moonshots. No leverage, no lucky timing, no genius required. Just a diversified basket of Swiss companies, dividends reinvested, left alone for a century. Through a world war, two oil shocks, a dotcom bubble, a financial crisis, and a pandemic (Chart 1).

The scoreboard reads 7.75% per year. In Swiss francs, the hardest currency human beings have managed to produce. Strip out inflation and you are still left with 5.73% real, per year, for a hundred years. The same CHF 1,000 in Swiss bonds grew to roughly CHF 48,000. Perfectly respectable. Also thirty-six (36!) times less.

No hype. No headlines. The silent compounders.

And here is the part I find genuinely astonishing: this was achieved by a landlocked country of nine million people whose most famous exports are discretion, chocolate, and the concept of being on time.

How?

Before we answer that, let me show you why you cannot afford to look away. This week, an early birthday present: the short version of our biggest study ever.

Long-term wealth.

The Swiss way.

Chart 1: CHF 1,000 becomes CHF 1.74 million: Swiss equities, bonds and consumer prices, 1925–2025 (log scale)

The Swiss Franc (CHF): Even the World’s Best Money Melts

The Swiss franc (CHF) is the strongest currency of the modern era. Ask anyone who exports from here.

And yet.

Over the last thirty years, the franc itself lost about 17.6% of its purchasing power. Gently, politely, but irreversibly. Over the same period, the Swiss equity market returned +638% in real terms, after inflation (Chart 2).

Read those two numbers together. The best currency on earth could not preserve wealth. The businesses could. And multiplied it seven times over.

That is the quiet, unfashionable lesson of a hundred Swiss years: cash is how you keep score; companies are how you keep wealth. Even in Switzerland. Especially in Switzerland.

So yes: with investing, you can lose money. Every honest investor will tell you that. But the thirty-year chart whispers the harder truth back: without investing, you have already lost. Slowly, politely, in the world’s best currency. The treadmill never stops; it only changes speed.

Fun Fact: Switzerland grows exactly zero cocoa beans. Not one. Yet «Swiss chocolate» is a global category. Buy the bean, add the precision, keep the margin: the entire Swiss business model in a bar.

Fine, you say. Swiss equities, then. I’ll buy the index and go back to my Cervelat.

Not so fast.

Chart 2: Even the strongest currency loses to inflation — Swiss equities do not: 30-year real total return of the SPI vs the franc’s purchasing power

Swiss Performance Index: Three Elephants and Two Hundred Passengers

Here is the uncomfortable truth about «buying Switzerland».

The Swiss Performance Index (SPI) is dominated by three giants. Nestlé, Roche and Novartis carried roughly half the index for most of this century; even today they still weigh in around 37%, with some two hundred companies sharing what remains. All three are magnificent enterprises with genuine structural questions: patent cliffs, portfolio complexity, the sheer physics of moving the needle at almost a trillion US-dollars of combined market value.

So when you buy «the Swiss market», you are not buying the hundred-year machine from Part 1. You are renting three elephants and two hundred passengers, weighted so that the elephants decide the ride.

The hundred-year returns were never distributed equally. Some companies did the compounding. Others went along for it. Which raises the only question that matters: how do you tell them apart? Before the next hundred years, not after.

This is exactly why we built our screening. More than 800 global quality companies, 194 of them Swiss, ranked daily on the numbers that actually predict compounding: returns on capital, moats, balance-sheet discipline (Chart 3). It is the lens we use ourselves every week. And since this year, you can look through it too.

And at the very top of that Swiss list, the same pattern repeats, over and over. High returns on invested capital. Year after year after year.

Which brings us to the magic metric and number, respectively.

And to our biggest research project ever.

Chart 3: The arvy screening lens on Switzerland: 194 Swiss names, ranked by quality (get access here)

Swiss equities: Winners Keep Winning

Time for the «Good Chart». And this week, a first: the best chart we have ever built is one we are not yet allowed to show you.

Here is why it matters. From US equities and global markets, the evidence has piled up for decades, study after study: return on invested capital is one of the most powerful quality signals in investing. Companies that earn high returns on capital, year after year, beat the market far longer than any textbook would allow.

Winners keep winning. And Mr. Market keeps being surprised.

Why ROIC?

Because it is the least romantic number in finance, and therefore the most trustworthy. ROIC asks one blunt question: for every franc entrusted to this company, how much comes back? Revenue can be bought. Adjusted EBITDA can be written. ROIC has to be earned, franc by franc.

But almost all of that evidence comes from abroad. US large caps, global indices, decades of American factor research. Which raises a question nobody had tested at this depth before.

So, in our biggest research project ever, together with a Swiss university, we ran the exact same analysis on our home market: the entire Swiss equity universe, 25 years of data, 2000 to 2025.

The cliffhanger, then: do Swiss equities show the exact same picture? Does quality pay, of all places, in the home market of quality? We know the answer. And the moment the academic ink is dry, you will see it here first, staircase, buckets and significance tests included.

Everything else the century taught us is already public: this week we published the full study on our homepage, our biggest ever (Chart 4).

And while we all wait for one chart, take a look at what waiting has already built in this country.

In 1291, three mountain cantons swore an oath of mutual defense on the Rütli meadow: «Unus pro omnibus, omnes pro uno.» No conquest plan. No exit strategy. Just a covenant, still outstanding after 735 years. I like to call it the most successful long-term contract in European history. Most companies cannot keep a strategy alive for 735 days.

That is the real birthday lesson.

Not the fireworks, the time horizon. A country that thinks in centuries produced companies that compound for centuries, and a stock market that rewards exactly the patience it was built on. The oath, the franc, the ROIC, the 1.74 million: one unbroken chain.

Tomorrow evening, when the Höhenfeuer burn above the valleys, ours included, somewhere above the Rhone, raise a glass of Fendant to the three farmers on that meadow. They signed the original shareholder agreement. We are all still collecting the dividends.

Happy Birthday, Switzerland. Tomorrow’s the day.

P.S. This Weekly is the short version. The full study, 100 years of data, two world wars, seven chapters, eighteen charts, and every Swiss company we cover, mapped, is now on our homepage: «100 Years of Swiss Equities: The Silent Compounders».

For the curious. And the patient.

This is the way.

Chart 4: Our biggest study ever: «100 Years of Swiss Equities: The Silent Compounders», now live on arvy.ch