investment viewpoints

    Analysing liquidity in the Swiss bond market

    Analyzing liquidity in the Swiss bond market
    Philipp Burckhardt, CFA - Fixed Income Strategist and Portfolio Manager

    Philipp Burckhardt, CFA

    Fixed Income Strategist and Portfolio Manager
    Markus Thöny - Head of Swiss Fixed Income

    Markus Thöny

    Head of Swiss Fixed Income

    Several key features help to explain the Swiss bond market’s low liquidity relative to other asset classes:  

    • For one thing, the market is still dominated by passive investors and buy-and-hold investors.  
    • Trading books of market makers have also decreased following additional regulatory requirements. CHF bonds are sometimes traded and held by only a few market makers at a time.
    • Professional investors often gauge a bond’s liquidity by the width of the bid-ask spread. With CHF bonds, this can amount to several percentage points.

    It is also important to know how much of a bond has been traded in recent days. In this paper, we examine the size of the trading volumes more closely, as well as the sector distribution.

    To read our paper, please use the download button provided.

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