The Swiss National Bank (SNB) recently made significant changes to its investment portfolio, particularly in the technology and automaker sectors. Notably, the bank nearly doubled its investments in electric-vehicle makers, Rivian Automotive (RIVN) and Lucid Group (LCID), during the second quarter.
In a surprising move, the bank sold off its holdings in Apple (AAPL) and General Motors (GM), among other stocks. These stock trades were disclosed in a form filed with the Securities and Exchange Commission. However, the SNB declined to comment on its investment decisions.
The SNB’s balance-sheet total experienced a historic decline, shrinking for the first time in 15 years. By the end of 2022, it decreased from $1.2 trillion to $988 billion. This loss was primarily attributed to valuation losses on investments, with foreign currency sales also playing a significant role, as stated in the bank’s annual report.
During the second quarter, the SNB increased its stake in Rivian by purchasing an additional 1.1 million shares, bringing its total investment to 2.3 million shares. Although Rivian stock significantly underperformed the S&P 500 in 2022, dropping by 82%, recent trends suggest a promising turnaround. In the third quarter, the stock has surged by an impressive 39%, outperforming its benchmark index.
In a similar fashion, Lucid Group experienced a tumultuous year in 2022 with its stock plummeting by 82%. However, it managed a marginal 1% gain in the first half of this year. Unfortunately, recent developments indicate a decline, with Lucid shares dropping by 15% so far in the third quarter.
The stock’s downward trajectory can partly be attributed to a disappointing second-quarter report released in early August. Lowering prices for its electric vehicles has raised concerns among investors regarding dwindling demand.
Despite the challenging performance, the SNB acquired an additional 1.5 million shares of Lucid Group during the second quarter, culminating in its ownership of 3.2 million shares.
These substantial shifts in the SNB’s investment strategy highlight its proactive approach and adaptability in navigating the evolving landscape of the technology and automaker sectors.
Apple Faces Challenges in China
The Swiss National Bank recently sold 6 million Apple shares, reducing its investment to 57 million shares of the iPhone maker. Apple has encountered difficulties in China where the government has banned its officials from using iPhones at work. In addition, smartphone manufacturer Huawei, based in Shenzhen, has released a high-speed, high-priced phone that could potentially chip away at Apple’s market share. Despite these setbacks, Apple is preparing to unveil its new iPhone 15 this Tuesday, which is expected to have a higher price point compared to its predecessor.
The negative news surrounding Apple has caused a 9.3% decline in its shares during the third quarter. However, it is important to note that Apple’s shares experienced a significant 51% surge in the first half of 2023, more than compensating for a 27% drop in 2022.
GM Faces Challenges in the Automotive Industry
GM stock has also faced challenges recently and is currently down 15% in the third quarter. In the first half of 2023, GM’s shares saw a 15% increase following a 43% decrease in 2022. The main issue haunting GM and other major automakers is the possibility of a strike by the United Auto Workers. Even if a strike does not occur, labor costs within the industry are anticipated to rise. However, based on historical data, if a strike were to happen, it is expected to be resolved relatively quickly with minimal impact on GM stock.
To conclude, the Swiss National Bank sold 600,000 GM shares, resulting in a total of 5 million shares at the end of the second quarter.
Note: “Inside Scoop” is a regular feature that covers stock transactions by insiders including corporate executives, board members, prominent figures, and politicians. These individuals are required to disclose their stock trades with regulatory groups such as the Securities and Exchange Commission.