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Price of Safety Surges in Swiss Stocks as Old Haven Awakens

  • Dividend yield for SMI companies is attractive versus bonds
  • Expectations for stock volatility are lower than for euro area
Updated on

Swiss stocks, dislodged in 2015 as a haven from European volatility, have seen the status restored following Brexit -- so much that some investors are balking at valuations.

After trailing shares from Germany to France and Italy for most the past year, the Swiss Market Index is finding a new appeal in the fallout of the U.K. vote to leave the European Union. Investors buying up megacaps including Nestle SA, Novartis AG and Roche Holding AG have pushed the valuation of companies in the gauge to more than 16 times estimated profits, the highest since 2013 relative to the Euro Stoxx 50 Index.