Morgan Stanley: Buy Swiss Francs, the most prominent safe-haven asset

2026-02-23 20:15:20

Investing.com - Morgan Stanley analysts state that the Swiss franc is an overlooked and undervalued safe-haven asset, with its appreciation magnitude and speed expected to far exceed current market expectations.

As of 6:30 AM Eastern Time (7:30 PM Beijing Time), USD/CHF decreased by 0.1% to 0.7756, while EUR/CHF increased by 0.1% to 0.9147.

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In a report released on February 23, Morgan Stanley noted that although investors generally agree on which assets are safe havens, surprisingly, many safe-haven assets perform inconsistently during extreme market stress periods.

The American bank states that compared to bonds, yen, US dollar, and gold, the Swiss franc is the most resilient safe-haven asset, performing broadly regardless of the type of shock and maintaining a positive performance throughout the shocks.

Morgan Stanley considers the Swiss franc the “best” safe-haven asset because it is most likely to retain its value under the widest range of conditions, and it is particularly attractive and shows clear advantages regarding the risks investors are most concerned about—namely inflation and currency depreciation, fiscal stability, investor protection, and asset safety.

Additionally, Morgan Stanley said, “We believe investors are underestimating the Swiss National Bank’s current tolerance for a stronger Swiss franc.” “We believe that as long as a stronger Swiss franc does not harm inflation prospects, the Swiss National Bank may be more willing to tolerate the franc’s appreciation.”

The bank states that investors may be undervaluing the safe-haven value and fundamental factors driving the Swiss franc’s strength, “We expect EUR/CHF to reach 0.87 (down 5%), while market consensus expects the Swiss franc to weaken.”

The bank believes that in a “bear market scenario” for the US dollar, USD/CHF could fall to 0.64, and it suggests that the market is pricing this “gold-like” hedging tool too low.

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