2025 delivered no shortage of drama across the global economic, business, and financial landscape.
From DeepSeek’s shockwaves to tariff battles and the relentless march of AI reshaping boardrooms and stock charts, the year had it all.
As we step into 2026, Invezz spoke with Bruno Schneller, managing partner at Zurich-based Erlen Capital Management, to unpack the themes that matter most, along with his dos and don’ts for investing in the year ahead.
“The AI theme is not a monolith; focus on companies with credible revenue paths and strong cash‑flow generation. Avoid pure‑play startups with no clear monetization timeline,” Schneller tells Invezz, warning that the heavy concentration of gains in a few mega-cap names means any shift in sentiment could trigger sharp corrections.
His advice: “Ensure your portfolio has a clear plan B.”
Looking forward, Schneller expects 2026 to be a year of continued AI-driven growth, higher leverage, and greater active‑management opportunities.
Excerpts:
Bruno Schneller, Erlen Capital Management
Themes shaping investment sentiment in Switzerland
Invezz: What are the themes dominating investment sentiment among institutions and families in Switzerland?
Investment sentiment in Switzerland today is shaped by three dominant themes.
First, macro and geopolitical uncertainty is encouraging investors to take a more cautious stance.
Families and institutions are increasing diversification, emphasising high-quality fundamentals, and maintaining exposure to safe-haven assets.
Second, the Swiss franc’s persistent strength continues to influence portfolio construction.
Its role as a defensive currency affects both domestic and international allocations, with investors weighing currency risk more actively.
Third, there is a strong appetite for innovation and technology-driven growth, particularly around AI, automation, and fintech.
Switzerland’s expanding ecosystem in these areas has become a focal point for long-term capital.
Overall, sentiment reflects a balance of caution about the global backdrop and optimism about structural growth opportunities.
Not in a full-scale AI bubble with valuation excesses can unwind sharply
Invezz: Erlen Capital has made an interesting point about how the US funds its enormous CAD in part by exporting US stocks to foreign investors. But you have also mentioned how high valuations run the risk of being followed by sharp corrections. Considering the so-called AI bubble is the hot topic of debate right now, which side of the debate do you currently stand on?
AI is a profound productivity revolution, but not all parts of the AI value chain are priced rationally. I would frame it this way:
Yes, the long-term opportunity is real—AI will permanently raise corporate profitability and reshape multiple industries.
But pockets of the market have moved well ahead of fundamentals.
In particular, expectations around compute demand, model monetisation, and AI-related capex assume a straight-line trajectory that rarely exists in technological cycles.
I don’t subscribe to the view that we are in a full-scale bubble resembling 1999—corporate balance sheets today are far stronger, and many AI leaders have robust cash flows.
But we are in a phase where valuation excesses can unwind sharply, especially in segments where revenue realisation is still unclear.
So I’m in the “opportunity with discipline” camp: structurally bullish, tactically selective.
How to distinguish between sustainable valuations and financial illusion in AI
Invezz: Noted markets veteran Ed Yardeni recently called for underweighting the Magnificent tech stocks, highlighting concentration risks. How do you distinguish between sustainable valuations and speculative financial illusion in AI and tech? Is there a specific earnings-to-capex threshold or revenue realization timeline that makes your alarm bells ring?
Distinguishing between sustainable valuations and speculative financial illusion in AI and tech is indeed challenging but essential.
One approach is to closely examine the business model and revenue streams.
For sustainable valuations, there should be a clear path to profitability, with growing and stable revenues that are not solely dependent on one-time events or speculative factors.
The earnings-to-capex (capital expenditure) ratio can be a useful indicator.
While there is no hard and fast threshold, a consistently high capex relative to earnings without a corresponding increase in sustainable revenues may raise concerns.
Additionally, the timeline for revenue realisation is critical.
If a company is projecting significant future revenues but has little to show in the present and lacks a concrete plan for achieving those projections, it may be more speculative.
It is also important to consider the competitive environment and the company’s unique value proposition.
Sustainable companies should have a competitive advantage that is difficult to replicate and a track record of innovation and execution.
On measures introduced in UK budget to boost investment in stock markets
Invezz: Recently in its latest autumn budget, UK has introduced some measures to boost investment in its stock markets which has seen listings move away to the US, and fewer IPOs. The government has also introduced reforms in Isas for the same. Do you think it will have an impact both on retail investment in UK equities as well as listings?
The measures introduced in the UK’s latest autumn budget aimed at boosting investment in its stock markets are certainly noteworthy.
However, the impact on retail investment in UK equities and listings may be complex.
On the positive side, reforms in ISAs (Individual Savings Accounts) could potentially encourage more retail investors to participate in the market, providing additional capital.
However, the trend of listings moving to the US and fewer IPOs in the UK indicates that there are still challenges to overcome.
These challenges may include perceptions of market liquidity, regulatory environment, and global competition.
It will likely take a combination of sustained efforts to improve market conditions, investor confidence, and a favorable regulatory framework to have a significant and lasting impact on both retail investment and listings in the UK.
Google’s strides in AI noteworthy but cant dismiss continuous innovation in sector as a whole
Invezz: Another hot topic of discussion is how Google is rescripting the AI champions story with its latest gemini model getting rave reviews, threatening ChatGPT’s dominance, and its TPUs finding more clients, thus threatening Nvidia’s supremacy. What are your thoughts?
Google’s latest Gemini model and its advancements in AI are certainly making waves in the industry.
The positive reviews highlight the potential for significant progress in AI capabilities.
This development does pose a competitive threat to ChatGPT’s dominance, as it underscores the ongoing race for AI supremacy.
In terms of Google’s TPUs (Tensor Processing Units) finding more clients, this is also a noteworthy development that could impact the market dynamics.
It indicates that Google is making strides in both the software and hardware aspects of AI, potentially challenging Nvidia’s supremacy.
However, it is important to recognize that competition in this space is intense, and while Google’s advancements are significant, other players like Nvidia and others are also continuously innovating.
The AI landscape is likely to remain highly competitive, with companies constantly striving to stay ahead through technological breakthroughs and strategic partnerships.
Why are more hedge funds closing down?
Invezz: 2025 has also seen the shuttering of many hedge funds- the most talked about was Michael Burry’s, but others like Candlestick, Eisler have also shut down. More than 2,800 hedge funds have shuttered since the start of 2020, exceeding launches. Your thoughts?
The headline numbers can look alarming, but consolidation is natural in a maturing industry. Three forces are driving closures:
Performance dispersion has widened: Only a subset of managers can consistently extract alpha in an environment dominated by quant flows, macro uncertainty, and high correlations.
Rising operational costs: Data infrastructure, compliance, and talent costs have increased sharply. Sub-scale funds find it difficult to justify the overhead.
Institutional capital prefers larger platforms: Allocators increasingly want multi-strategy resilience, risk-management sophistication, and institutional reporting. Smaller funds struggle to compete.
The result is a Darwinian cycle: the industry is shrinking in number, but not necessarily in opportunity. The survivors are stronger, but the barriers to entry have become much higher.
Investing in 2026: stay pro-risk but be selective; have a plan B beyond mega-cap stocks
Invezz: Any broad investment guidance/ advice you would like to leave the readers with heading into 2026, or any forecast about global economies and markets for next year?
Looking ahead to 2026, the AI build‑out will remain the dominant macro force.
AI capital spending is still likely to support growth next year, contributing to US growth at three times its historical average.
However, this spending is front‑loaded and debt‑financed, creating a more leveraged financial system that is vulnerable to shocks like bond‑yield spikes.
In this environment, I advise investors to:
Stay pro‑risk but be selective, the AI theme is not a monolith; focus on companies with credible revenue paths and strong cash‑flow generation. Avoid pure‑play startups with no clear monetisation timeline.
Prepare for higher volatility. The concentration of gains in a few mega‑cap stocks means that any shift in sentiment could lead to sharp corrections. Ensure your portfolio has a clear plan B.
Look beyond the US. Japanese equities offer attractive nominal growth and corporate‑governance reforms, while selective European exposures may benefit from a cyclical recovery.
Expect more dispersion — across regions, sectors, and even within the tech leaders. The last decade rewarded passive exposure. The next decade will reward selectivity.
Don’t abandon diversification, but make it deliberate. Simply spreading bets across sectors may not work when a few mega‑forces are driving everything.
Instead, take concentrated positions in themes you understand well and hedge where necessary.
In summary, 2026 will be a year of continued AI‑driven growth, higher leverage, and greater active‑management opportunities.
The key is to balance optimism about the transformation with discipline around valuation and risk.
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