There’s an ETF for That? Switzerland

iShares MSCI Switzerland ETF

EWL

-0.57%

EWL is the incumbent choice for Swiss equity exposure, managing $1.2 billion in assets with a track record stretching all the way back to March 12, 1996.

This is a straightforward passive ETF that tracks the MSCI Switzerland 25/50 Index, offering exposure to 42 of the country's largest companies. It is market cap weighted, meaning blue-chip names like Nestlé, Roche Holdings, Novartis, Richemont, Zurich Insurance, and UBS Group dominate the top of the portfolio.

As expected, given the makeup of Switzerland’s economy, the ETF carries a heavy overweight to healthcare stocks at 34%, followed by financials and consumer staples.

One major downside is the 0.5% expense ratio. While that was competitive when the fund launched nearly three decades ago, in today’s lower-cost ETF environment, it’s on the expensive side.

Franklin FTSE Switzerland ETF

FLSW

-0.64%

My preferred option for Swiss equity exposure is the smaller and newer FLSW. It debuted in February 2018 and currently manages around $51 million in assets. What sets it apart is cost—FLSW charges just a 0.09% expense ratio, meaning a $10,000 investment costs only $9 annually, compared to $50 for EWL.

FLSW tracks a different benchmark, the FTSE Switzerland Capped Index, which includes 52 holdings and features a nearly identical list of top names like Nestlé, Roche, and Novartis. It also maintains similar sector weightings, with strong exposure to healthcare, financials, and consumer staples.

The big advantage here is that while EWL and FLSW have very similar historical performance, top holdings, and sector exposures, they track different indexes. That means they are not considered “substantially identical” under IRS rules and could potentially be used for tax-loss harvesting purposes without triggering the wash sale rule.

Invesco CurrencyShares Swiss Franc Trust

FXF

-0.18%

While the U.S. dollar still holds its status as the world’s reserve currency, Trump’s latest round of tariffs has shaken global confidence. The greenback has slipped year to date, and in response, investors have moved not just into gold, but also into historically defensive currencies like the Swiss franc.

For direct exposure to the Swiss franc, consider FXF. Unlike many currency funds that rely on derivatives like futures or swaps, FXF simply holds Swiss francs in a custodial trust and trades in U.S. dollars. It seeks to track the WM/Reuters Swiss Franc Closing Spot Rate as closely as possible.

One thing to keep in mind is the fund’s yield. While it does earn interest on its Swiss franc holdings, that yield is currently minimal. The Swiss National Bank’s policy rate sits at just 0.25%. If the interest earned doesn’t fully cover FXF’s expenses, the fund will withdraw Swiss francs from the trust to make up the difference, which can cause a slight erosion of capital.

FXF currently manages $489.2 million in assets and charges a 0.40% expense ratio. Consider it a pure-play on the Swiss franc that can benefit from rate hikes, which would improve yield, or from the franc appreciating against the U.S. dollar—or both.

Please note that this article reflects the author’s personal views and does not represent the opinions of the publication or its affiliates. It is for informational purposes only and does not constitute investment advice. It is essential to seek guidance from a registered financial professional before making any investment decisions.