The CIO of Rothschild & Co Bank AG Switzerland discusses investment strategies in times of geopolitical tensions, the stability of Switzerland’s financial sector, and the opportunities that could arise from a second Trump presidency.
Mr. Mejia, geopolitical tensions have repeatedly caused uncertainty in the markets. Do you expect this phase to continue?
Market volatility is likely to persist. However, we must distinguish between news that matters to us as citizens and news that matters to us as investors—these are two different things. As an investor, I try to filter out the noise and focus on one key question: What truly impacts the real economy and corporate profitability?
Are your clients becoming more nervous?
There is certainly a sense of unease, which is understandable given the headlines. However, our clients have great confidence in our advisory services. They choose us because we take a long-term approach and prioritize the preservation of their wealth.
This is why it is absolutely crucial to look beyond the headlines. Over the past year alone, half the world's population got a new president, conflicts in the Middle East continued, Europe faced a crisis of confidence, and China's economy remained weak. Yet, equity markets rose by more than 20 percent. Even in an environment of declining inflation and a stronger US dollar, gold prices surged 27 percent in 2024 compared to the previous year—defying widespread expectations. Since 2019, gold prices have climbed 72 percent.
«It is absolutely crucial to look beyond the headlines.»
What impact do you expect from Donald Trump's second term as US president?
From his first presidency, we know that Donald Trump has a populist style and that his decisions often create turmoil. However, his policies are fundamentally pro-business—he favors tax cuts and deregulation. As a result, opportunities will certainly emerge.
So, are you optimistic?
«Optimistic» is not the right word in this context. My role requires me to remain objective and pragmatic—that’s what I owe to my clients.
How important are US developments for Europe?
Along with developments in China, they can have a decisive impact.
Europe is not in great shape at the moment. Germany is struggling, and France is weakening as well. However, Europe could benefit from its key export partners and from an eventual resolution to the Russia-Ukraine conflict.
If China’s leadership successfully engineers a turnaround, the US economy remains strong, and Europe gains access to cheaper energy from Russia, these factors could provide much-needed stimulus for European economies. Financial markets have started on a strong note, seemingly pricing in some of these developments.
Let’s talk about Switzerland. The collapse of Credit Suisse in 2023 was a major moment. How much did it damage Switzerland’s reputation as a financial center?
The downfall of Credit Suisse (CS) was undoubtedly a very difficult moment for Switzerland. However, as a foreigner living and working here, I was surprised by the harsh criticism directed at the Swiss National Bank (SNB) and the financial regulator FINMA over their handling of the crisis.
«The CS crisis cannot be viewed in isolation.»
Why is that?
I do not share that criticism. From my perspective, both FINMA and the SNB did a very good job.
The Parliamentary Investigation Committee’s report paints a different picture.
FINMA and the SNB may have lacked decisiveness at times, but it is important to consider the extreme volatility of the situation. Ultimately, they managed to contain the crisis and prevent further contagion.
The CS crisis cannot be viewed in isolation. At the same time, US regional banks were under severe pressure following the collapse of Silicon Valley Bank, with several others on the brink of failure. The world was bracing for potential bank runs—including at Credit Suisse. One can only imagine the repercussions for the Swiss banking system if that had happened.
So, in your view, Switzerland’s reputation has not suffered?
From an external perspective, quite the opposite. Thanks to the SNB and FINMA, Switzerland’s financial sector has emerged stronger from this crisis.
However, Switzerland is under pressure. By 2027, Hong Kong and Singapore are expected to overtake it as the world’s leading offshore financial hubs. Does this concern you?
No, because I have confidence in Switzerland’s strengths. The country has a young, highly educated workforce, a strong competitive mindset, and a long-standing culture of innovation. In fact, Switzerland has ranked first in the Global Innovation Index for 14 consecutive years.
Even if other financial centers grow at a faster pace, Switzerland remains in a strong position. The only thing we cannot afford to do is become complacent.
Carlos Mejia is Chief Investment Officer (CIO) at Rothschild & Co Bank Switzerland and a member of the Executive Committee. He joined Rothschild & Co in 2012 from Investec Bank, where he served as Chief Investment Officer and Head of Portfolio Management from 2010 to 2012.
From 2005 to 2010, Mejia worked at UBS, where he held various roles, including Head of Investment Strategy and Portfolio Construction (London) and Head of Asset Allocation for discretionary portfolios (Zurich).
