As some markets are see-sawing, Switzerland’s exchange traded fund (ETF) could be primed for a rise after having underperformed.
The iShares MSCI Switzerland (EWL) ended 2007 up 4.5%, but has gotten off to a slow start so far this year. Year to date, it’s down 7.9% and currently resides 7.7% below its trend line (200-day moving average).
The standard of living in the country is higher than that of any other European economy. Inflation and unemployment (3.1% in 2007) are low. The economy is heavily dependent on foreign guest workers, who make up 20% of the labor force. And the country’s notorious banking secrecy laws have made it a safe haven for investors.
Let’s not forget their delicious, delicious chocolate, either.
Its GDP stagnated from 2001-2003, but now there are signs of a turnaround: in 2006, it went up 2.9%, and last year it leapt another 2.6%. What’s in store for 2008?
Thomas Smicklas for Seeking Alpha feels that Switzerland and its ETF could be primed for a rebound. Its political neutrality could mean that the top holdings in the fund can do business with any country in the world, which set them up for some upward movement.