Top 7 Swiss ETFs to Invest In Right Now

In 1990, Canada became home to the introduction of a new investment security known as Toronto Index Participation Shares and later regarded as the world’s first exchange-traded fund (ETF). Traded just like any other share on the Toronto Stock Exchange, they tracked the main Canadian equity market index and gained popularity with local investors, attracting them with their low-cost access to a diverse range of leading blue chips.

Today, ETFs are among the most widely traded and liquid securities of any type, with worldwide assets reaching USD 13.14 trillion as of June 2024. With annual expenses as low as 0.02% charged by Spiders, the world's largest ETFs, as well as some ETFs charging no fees at all, investing has become highly accessible. ETFs now provide access to virtually every tradable asset or security, including precious metals, corporate bonds, hedge funds, private equity, and other new issues.

As one of the world’s leading financial centers, hosting Europe’s third-largest stock exchange, Switzerland offers a range of ETFs with exposure to a wide variety of locally traded equities and bonds. They offer Swiss investors access to virtually every type of national investment asset at the lowest possible cost, yet without the risks that come with investing overseas in what has historically been the world’s strongest currency (one of the selected funds even covers this). But the question remains: What are the best ETFs Switzerland has to offer?

Below is our best 7 Swiss ETF list to invest in now, covering real estate, the Swiss franc, government bonds, and socially responsible investments – all of which are listed on SIX, the Swiss stock exchange.

#	ETF Name & Ticker	Inception Date	Base Currency	Weighting Method	Annualized Total Return*	Sharpe Ratio**
1	iShares Swiss Domestic Government Bond 3-7 ETF (CSBGC7)	18/11/2003	CHF	-	1.03%	-0.06
2	iShares Swiss Dividend ETF (CHDVD)	28/04/2014	CHF	market-capitalization-weighted	8.25%	0.67
3	iShares MSCI Switzerland ETF (EWL)	12/03/1996	USD	market-capitalization-weighted	7.04%	0.34
4	UBS ETF (CH) MSCI Switzerland IMI Socially Responsible (CHSRI)	11/09/2017	CHF	market-capitalization-weighted	9.69% (5 years)	0.74 (5 years)
5	Invesco CurrencyShares Swiss Franc Trust (FXF)	21/06/2006	USD	-	1.27%	-0.3
6	UBS ETF (CH) – SXI Real Estate® Funds (SRFCHA)	31/03/2011	CHF	market-capitalization-weighted	5.04% (10 years)	0.68
7	iShares Core CHF Corporate Bond (CHCORP)	14/01/2014	CHF	equal-weighted	0.50%	0.22

Performance comparison of selected Swiss ETFs (all traded on SIX) as of the end of June 2024
* Since inception, unless otherwise indicated; ** 10 years, unless otherwise indicated
Source: Yahoo Finance, iShares, UBS, Invesco

1. iShares Swiss Domestic Government Bond 3-7 (CSBGC7)

Investing in fixed-income assets has long been a prudent choice for many individuals. In fact, PIMCO noted the following in their 2024 outlook: “We strongly favor fixed income in multi-asset portfolios. Given current valuations and an outlook for challenging economic growth and diminishing inflation, we believe bonds have rarely appeared more compelling than equities. We also look to maintain portfolio flexibility in light of macro and market risks.”

For those who prefer not to select individual bonds for their portfolio and seek the safest possible option, a reputable ETF tracking government-issued fixed income is a great alternative. For example, the iShares Swiss Domestic Government Bond 3-7 (CH) ETF, managed by BlackRock since its acquisition of the brand and business from Barclays in 2009, seeks to track the SBI® Domestic Government 3-7 Total Return Index. This index focuses on Swiss government bonds with maturities ranging from 3 to 7 years, offering middle-range government-issued bonds that provide investors with stable but relatively modest yields with minimal risk.

Launched on November 18, 2003, and domiciled in Switzerland, this ETF boasts more than CHF 530 million in assets under management and holds four securities in its portfolio as of the end of June 2024: Swiss domestic bonds with ISINs CH0008680370 (34.80% of holdings), CH0224397346 (25.71%), CH0224397171 (20.98%), and CH0031835561 (18.47%). Arguably, this may be the most stable EFT out there.

The truth is, investing in a fixed-income ETF that holds high-quality Swiss government bonds can be a wise choice for many. Thankfully, the Swiss Domestic Government Bond 3-7 ETF is the perfect instrument to gain access. These bonds are globally regarded as some of the safest investments, thanks to the country’s political stability and economic strength. Not only do they add flexibility to an investor's portfolio and offer a yield of around 1.85% per year – which currently outpaces the inflation level of 1.4% – but they are also poised to thrive in the still-elevated interest rates environment.

2. iShares Swiss Dividend ETF (CHDVD)

High-dividend stocks are attractive, even in times of volatility, seeing as dividends make up a substantial portion of the total return. According to the S&P Dow Jones Indices, dividends have contributed approximately 32% of total return for the S&P 500 since 1926, while capital appreciations have contributed 68%. What’s more, since 1960, 85% of the cumulative total return of the S&P 500 Index can be attributed to reinvested dividends combined with the power of compounding.

Growth of a hypothetical USD 10’000 invested in the S&P 500 in 1960 with and without reinvested dividends
Source: Hartford Funds

In light of uncertain market conditions, maintaining a portfolio with relatively high yields can be achieved by investing in the high-dividend stocks of some of the biggest Swiss companies, such as Nestlé SA and Novartis AG. That said, constructing a well-diversified stock portfolio can be challenging, which is why the iShares Swiss Dividend ETF (CH), which offers a consistent yield with moderate market risks, stands as an ideal solution.

The fund seeks to track the performance of an SPI® Select Dividend 20 Index, composed of Swiss companies with high dividend yields and a sustainable dividend policy. Over the past 23 years, the Swiss Performance Index (SPI), including dividend payments, has risen 194%, but only by 57% when excluding dividends. The current 12-month trailing dividend distribution yield is 3.98%, which is well above the 10-year average of around 3% (as of the end of June 2024).

The dividends in the ETF are distributed to investors on an ad-hoc basis, but at least annually. This Swiss ETF is a substantial fund, managing over CHF 2.1 billion in assets. Notably, the P/E indicator for the ETF holdings is moderate at 18.96. The best is to invest in stocks of the companies with a P/E between 10 and 25 as those with a ratio lower than 10 can be a “value trap”, and the opposite, those that have indicator more than 25 usually can be too expensive to buy.

The main holdings of the iShares Swiss Dividend ETF are Novartis AG Registered Shares (14.87% of the holdings), Nestle SA (14.43%), Roche Holding AG (15.07%), Zurich Insurance Group AG (15%), and Swiss Re (10.68%), all of which are well-established operational companies with strong track records.

Having all of the aforementioned in mind, it’s clear that this ETF is one of, if not the best ETF to invest in for individuals with moderate risk tolerance who value consistency, regular payments, and prefer a moderate level of volatility in their investments.

3. iShares MSCI Switzerland ETF (EWL)

A part of your portfolio (depending on your investment strategy) should be allocated to equities. Many esteemed investment management firms, such as Vanguard, adhere to a widely recognized model for selecting financial instruments based on age. This model serves as a framework for their target-date funds allocation, which undergoes continuous rebalancing.

Vanguard target-date funds allocation based on years left to retirement age
Source: Vanguard

While you can choose to select stocks for your portfolio, another time saving option is to invest in a professionally managed ETF that encompasses over 40 Swiss companies from various economic sectors. Indeed, the iShares MSCI Switzerland ETF aims to track the performance of an index comprising most Swiss equities. The fund typically invests at least 80% of its assets in the component securities of its underlying index and in investments with economic characteristics substantially identical to those component securities.

This index is a free float-adjusted market capitalization-weighted index designed to measure the performance of the large- and mid-capitalization segments of the Swiss equity market with sustained cash flow. Over the past 30 years, the Swiss market has demonstrated exceptional performance compared to its global counterparts.

Established in 1996, the ETF currently holds assets of around USD 1.2 billion. Not only this, but it has delivered an annual total return of approximately 5.58% over the past 10 years (as of the end of June 2024) and maintains a moderate expense ratio of 0.5%. Plus, the ETF is characterized by a relatively low risk level, evidenced by a Sharpe ratio of 0.34 over the last 10 years and its price-to-earnings (P/E) ratio stands at a moderate 18.89.

The primary holdings of the ETF include some of the largest Swiss companies, such as Nestle SA (16.81% of total holdings), Novartis AG Registered Shares (12.90%), Roche Holding AG (11.85%), Zurich Insurance Group AG (4.51%), and ABB Ltd (4.55%). With all these benefits, there is no doubt that the iShares MSCI Switzerland ETF presents a compelling investment opportunity for those seeking relatively high income with moderate risks.

4. UBS ETF (CH) MSCI Switzerland IMI Socially Responsible (CHSRI)

If your goal is not only profits but also the opportunity to leave an impact through investing in socially responsible projects and companies, it would be reasonable to consider an ETF that allows for the support of multiple socially responsible companies simultaneously with a single investment.

Achieving high returns and supporting environmental sustainability are not mutually exclusive. In fact, Schroders’ Global Investor Study 2022 reveals that more than two-thirds (68%) of people who class themselves as having “expert/advanced” investment knowledge believe that sustainable investment is the only way to ensure profitability in the long term. This compares with 52% of “intermediate” investors and 43% of those who believe they have “beginner/rudimentary” investment knowledge.

When individuals seek to capitalize on significant value-creation opportunities while contributing to global sustainability goals – often pioneering solutions that redefine our relationship with the environment, they are in fact impact investing. True enough according to our previous findings, the FTSE EO 100 Index, which focuses on the largest 100 global cleantech firms, has consistently demonstrated the highest total returns, outperforming broader global equity markets across multiple timeframes.

5-year performance total return for selected FTSE Russell indices
Source: FTSE Russell

The UBS ETF (LU) MSCI Switzerland IMI Socially Responsible is an excellent option for those who value both sustainability and competitive returns. This ETF tracks an index comprising large, mid, and small-cap stocks in the Swiss equity markets that boast high environmental, social, and governance (ESG) ratings compared to their sector peers. This ensures the inclusion of best-in-class companies from an ESG perspective. The weight of each company is capped at 5%, which reduces dependency on the performance of the largest holdings.

Although relatively new, this ETF has attracted over CHF 700 million in investments since its launch, less than five years ago. It features a high/moderate price-to-earnings (P/E) ratio of 21.25, a low expense ratio of 0.28%, and an impressive Sharpe ratio of 0.74. Denominated in CHF, the ETF has performed outstandingly, returning approximately 93.38% since inception (as of June 2024).

The main holdings of the ETF are ABB Ltd. (5.61%), Lonza Group AG (5.60%), Givaudan SA (5.33%), Alcon AG (5.20%), and Sika AG (5.10%). The top 10 holdings constitute 51.55% of the total fund, ensuring that the ETF remains well-diversified. Overall, the fund comprises 57 holdings, offering moderate and reasonable diversification across various sectors, including healthcare, financials, industrials, and basic materials.

Considering the foregoing, the UBS ETF (LU) MSCI Switzerland IMI Socially Responsible is definitely a sophisticated investment opportunity with a strong social and environmental focus.

5. Invesco CurrencyShares Swiss Franc Trust (FXF)

Since 2002, the Swiss franc has appreciated more than any other major global currency. It has gained significant value against the euro, the United States dollar, and especially the British pound. For instance, in 2007, £1 was worth approximately CHF 2.50, whereas today, it is valued at around CHF 1.10.

The British pound, US dollar, and Euro exchange rate against the Swiss franc
Source: TradingView

The appreciation of the Swiss franc can be attributed to a very straightforward economic principle: over the long term, currencies of countries like Switzerland, which enjoy a long period of low-to-negative inflation rates, tend to appreciate. This phenomenon is explained by the theory of Purchasing Power Parity, which states that internationally traded goods must have comparable prices in every currency.

In light of the Swiss franc's consistent appreciation, it’s far from surprising that there is a corresponding Swiss franc ETF. This ETF allows investors to purchase shares in USD while storing value in Swiss francs. The fund aims to reflect the price of the Swiss franc, offering a cost-effective alternative to traditional foreign exchange market investments.

The Invesco CurrencyShares Swiss Franc Trust is a single currency fund designed to hedge market exposures during adverse market conditions. With net assets of approximately USD 190 million, it maintains a moderate expense ratio of 0.4% and a 5-year trailing return of 1.35% (as of the end of June 2024). Established in 2006, the fund also flaunts a positive Sharpe ratio of 0.07. In a nutshell, this ETF can provide a valuable hedge for the portfolio of any investor.

6. UBS ETF (CH) – SXI Real Estate® Funds (SRFCHA)

Swiss real estate has long been a compelling investment opportunity due to the underlying environment of low interest rates and rapid population growth, as well as its role as a robust hedge against inflation. According to Le Bijou, Swiss housing has actually proven to be a reliable hedge against inflation over the past 150 years. This is in stark contrast to commodities, particularly precious metals such as gold. Furthermore, over the past decade, real estate has outperformed the overall stock market, with cumulative returns being 1.54x greater.

Comparing the performance of the Swiss Stock Market Index (SMI) and SXI Real Estate® Funds Broad Total Return Index (SWIIT) from 2014 to 2024
Source: TradingView

The problem, however, has always been either a lack of expertise or the capital needed to buy a house (dubbed “direct real estate investment”) with the approximate market value of a lucrative 200 square meters house in Zurich being valued at a minimum of CHF 3’150’000, or around CHF 16’000 per square meter. Fortunately, there is an excellent alternative: A Swiss real estate ETF denominated in CHF that can offer exposure to the country’s real estate market – and UBS ETF (CH) – SXI Real Estate® Funds is one of them.

This ETF seeks to track the SXI Real Estate® Funds Broad Total Return index, which tracks Swiss exchange-listed real estate investment funds. The ETF replicates the performance of the underlying index by buying all its constituents and pays dividends annually.

With close to a billion (CHF 996.76 million) in assets under management, the UBS ETF (CH) SXI Real Estate Funds is a substantial fund. Launched on November 3, 2009, and domiciled in Switzerland, the fund has provided investors with a 4.56% 10-year trailing return and over 210% cumulative return since inception (as of the end of the end of June 2024). Even more interestingly, the fund's Sharpe ratio of 0.61 over the past decade (ending in June 2024) indicates a relatively high risk-adjusted performance.

The top 5 of its holdings are UBS (CH) PF Swiss Mixed Sima Ord (15.85% of its holdings), CS Real Estate Fund Siat (6.04%), UBS (CH) PF Swiss Residential Ord (5.06%), CS Real Estate Fund LivingPlus (4.99%) and Edmond de Rothschild Real Estate SICAV (3.98%) – with the top 10 holdings constituting 52.66% of the total assets.

All things considered, the UBS ETF (CH) SXI Real Estate Funds (CHF) presents a perfect opportunity for investors to diversify their portfolios with one of the best ETFs to buy and hold, with an allocation to the Swiss real estate market, and that has a high potential value-add over the long term. For those wondering “are ETFs good for long term?”, the answer is definitely “yes.”

7. iShares Core CHF Corporate Bond ETF (CHCORP)

Swiss corporate bonds have long been an effective portfolio diversifier seeing as they involve less risk than stocks and generate modest, yet attractive yields. In fact, according to Pictet Asset Management, Swiss bonds “remain an important and core asset class in multi-assets portfolios due to their defensive risk profile, generally measured by the volatility and drawdown. Compared to real estate and equities, CHF bonds show only a small fraction of risk, justifying its crucial role in terms of diversification and capital protection.”

Corporate bonds fall into two broad credit classifications: investment-grade and speculative-grade (or high-yield) bonds. The grades are assigned by three large firms: Standard & Poor’s (S&P), Moody’s, and Fitch, who screen the company to determine its creditworthiness – which later determines the bond's rating and affects the yield the issuer should pay to entice investors. That said, lower-rated bonds generally offer higher yields to compensate investors for the additional risk.

Bond Credit Ratings
Source: Wall Street Prep

Although investment-grade corporate bonds tend to remain attractive given their lower risk and modest yields, as noted in the Charles Schwab 2024 Mid-Year Outlook, high-yield bonds are an asset class subject to frequent increased volatility that reputable firms, including BNP Paribas in 2024, often remain “cautious” about, stating that they “wouldn't suggest large or overweight positions.”

Therefore, iShares Core CHF Corporate Bond ETF is a highly attractive option for investors wondering how to invest in Switzerland and seeking robust returns in the form of a fixed-income denominated in Swiss Francs (CHF), as well as for those looking to avoid the “cautious” high-yield bond market. Registered in Switzerland and Liechtenstein, this ETF aims to track the performance of an index comprising investment-grade corporate bonds denominated in CHF. It presents a diversified portfolio with over 700 holdings, approximately 55% of which are allocated in Switzerland.

The fund's net assets are approximately worth CHF 1.5 billion. Additionally, its twelve-month trailing distribution yield stands at 0.66%, with a weighted average coupon of 1.22% (as of the end of June 2024). Launched in January 2014, the fund has returned 0.50% since its inception, primarily due to the 2022 market downturn. However, the index has rebounded by 50% since then, and is expected to grow as market conditions stabilize, offering the potential for solid yields.

Impressively, the ETF is equal-weighted, with major holdings including corporate bonds from NESTLE SA (4.11%), ROCHE KAPITALMARKT AG (2.88%), DEUTSCHE BAHN FINANCE GMBH (2.01%), SWISSCOM AG (2.59%), and NOVARTIS AG (1.96%). It features a well-calibrated weighted average maturity of 4.6 years and a low expense ratio of 0.15%.

Consequently, the iShares Core CHF Corporate Bond ETF is an excellent addition to the investment portfolio of anyone seeking a large fixed income ETF with moderate profits and risks, and all holdings denominated in CHF.

Final Thoughts

It’s hardly surprising that Moonshot has been an avid supporter of ETFs since our inception. This is because they embody the democratization of investing, which has always been our guiding star.

In that respect, we are somewhat following the precepts of Warren Buffett, who has long been a powerful advocate for a passive approach to investing, especially for ordinary investors. He has argued that, by investing passively, “the know-nothing investor” can be completely ignorant of the technicalities and intricacies of financial markets, yet “can actually out-perform most investment professionals.”

The investment world has recognized this too, advocating for ETFs and other forms of passive investing, such as “tracker” funds, rather than an active selection of individual securities. At the same time, because they cover so many different types of investments, ETFs allow investors to stay in control when it comes to the allocation of their assets, if they prefer to do so. This makes it simple and straightforward for them to align their portfolios with their personal risk appetite and preferences.

Unfortunately, the universe of ETFs currently predominantly tracks public market assets, which, coupled with an increasing correlation between stocks and bonds since 2023, proves to be insufficient for portfolio diversification. Private market assets, in contrast, offer great diversification benefits due to their low correlation with stocks and bonds, yet they are rarely tracked by ETFs. At Moonshot, therefore, we address this issue with our portfolio offerings that mirror the work of ETFs with respect to private markets.

Our carefully vetted private equity, real estate, fixed income, and other industry-focused portfolios enable our members to invest in exclusive opportunities for just CHF 300 per month, or with a minimum lump-sum investment of only CHF 10’000. This ensures that mass affluent investors can not only build a diversified portfolio of publicly traded assets but also gain access to private market investments, which previously remained out of their reach– all at minimal cost.

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