Switzerland ETFs Buck Europe’s Trend

September 1st at 1:00am by Tom Lydon

Switzerland posted a record trade surplus and the country’s economic momentum is expected to continue through the third quarter. Risk aversion in the global markets has pushed up the Swiss franc, along with related exchange traded funds (ETFs).

The Swiss Federal Customs Office stated that exports increased by 2.2%, reports Catherine Bosley for Reuters. Additionally, Switzerland’s economic outlook is improving, with the ZEW investor sentiment index surging to 9.1 points in August, compared to 2.2 in July. Latest manufacturing PMI report increased to 66.9, a new record.

The Swiss franc has appreciated more than 10% against the euro in the wake of the eurozone problems, which has raised fears about export numbers but so far hasn’t noticeably diminished export numbers.

The Swiss National Bank currently has no exchange rate target and is currently focusing on price stability, report Sven Egenter and Silke Koltrowitz for Reuters. Switzerland’s economy is expected to expand by around 2.2% this year. There is currently no risk of inflation or deflation in Switzerland’s economy. The markets largely expect the Central Bank to hold interest rates at current low levels.

With its strong fundamentals, Switzerland is looking like an appealing place to park assets if you’re on the hunt for Europe exposure, according to ActionForex. The Swiss franc rallied against the dollar and the euro in August as a result of greater uncertainty in the U.S. and another round of sovereign debt risks in peripheral European economies. [Switzerland ETFs: A Safe Haven In Europe?]

For more information on Switzerland, visit our Switzerland category.

  • iShares MSCI Switzerland (NYSEArca: EWL)

Switzerland ETF, Europe ETFs

  • CurrencyShares Swiss Franc Trust (NYSEArca: FXF)

Swiss Franc ETF, Europe ETFs, Switzerland ETFs

Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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