EWL ETF

iShares MSCI Switzerland ETF has underperformed the S&P 500 index due to low exposure to growth sectors. EWL's sector allocation is heavily weighted towards defensive sectors, while growth sectors have minimal representation. Switzerland's manufacturing PMI has shown signs of improvement, but the direction of the services sector is uncertain.

Switzerland has shown resilience during the COVID-19 crisis and following inflation surge. The iShares MSCI Switzerland ETF (EWL) provides exposure to Swiss stocks and has provided downside protection and good returns since inception. EWL is not cheap and its current opportunity set does not justify the costs.

iShares MSCI Switzerland ETF has underperformed other European and global ETFs this year, but we think things could improve from here. The economic landscape in Switzerland is expected to improve as we close the year and next year's prospects look better. We highlight some of EWL's defensive characteristics which could come in handy.

EWL is exposed to some of Europe's most well-known stocks. Large allocations in healthcare and consumer staples make the ETF resilient. However, the resilience comes at a price and ultimately there's no reason to go overweight.