Ahead of Switzerland’s first-quarter GDP report due out May 30, economists are expecting growth of 0.2%. Not jaw-dropping, but better than the 0.1% increase Germany delivered in the first quarter.
Switzerland’s durability remains in tact, which could be a boon for EWL, a fact underscored by comments from one major ratings agency. Switzerland is home”very high economic strength, as reflected in the country’s open, highly developed and diversified economy that is both a major financial center and an important producer of chemicals and pharmaceuticals,” according to Moody’s Investors Service, Bloomberg reported.
Drilling down on EWL, an ETF with an annual expense ratio of 0.5% and $979.3 million in assets under management, investors will find an ETF suitable for those with conservative postures. The fund allocates a combined 51.5% of its weight to health care and consumer staples stocks. In other words, although it tracks non-U.S. stocks, EWL has benefited from investors’ preference for low-beta sectors such as staples and health care. [Take A Defensive Approach With A Health Care ETF]
And that explains the near-term rub faced by EWL. If stocks start a new leg higher on the back of a cyclical rotation, low-beta sectors could fall out of favor and there are slight signs that scenario is already playing out. On the other hand, investors looking for exposure to Europe without the volatility of Greece and Italy or the slack growth of Germany or France could find a home with EWL.
iShares MSCI Switzerland
ETF Trends editorial team contributed to this article.