Thursday’s ETF To Watch: MSCI Switzerland Index Fund (EWL)

by on March 1, 2012 | ETFs Mentioned:

As we enter March, investors have plenty on their minds for the coming month. Yesterday saw a slew of important U.S. data hit the market as both GDP and personal consumption saw a healthy uptick, sparking more confidence in domestic markets. In fact, U.S. confidence also showed a sizable gain on Tuesday, giving a fair amount of momentum to indexes, as the Dow Jones closed above 13,000 for the first time in several years this week. The focus of today will shift to countries all around the world, as opposed to just the U.S., as a number of important economic indicators will be released [see also ETF Insider: Will Economic Data Derail The Bull Train?].

One of the most important data points on the day will come from Switzerland. Swiss GDP is slated to be released today, as the country of neutrality will be on the chopping block amid all of the woes that Europe has seen lately. Switzerland has largely held out of any issues involving Greece, but the indirect impact of the debt crisis still has a say over the Swiss given that the franc was recently pegged to the euro. The euro has made strides to recover lost ground in the last month or so, but its losses prior to that may have been enough to cripple the franc [see also Doomsday Special: 7 Hard Asset Investments You Can Hold in Your Hand].

Analysts are predicting GDP figures to come in at 1.1%, a drop from the previous reading of 1.3%. But certain firms see tomorrow’s report coming up shy due to the franc’s weakness over last quarter. “Switzerland’s annual gross domestic product growth will ease to 0.8% in the first quarter of this year from 1.1% in the final quarter of 2011, as the slowing global economy and strong franc weigh on its export and industrial sectors, a survey showed Wednesday” writes Dow Jones Newswires. It should be noted, however, that domestic consumption is expected to hold strong in 2012 for the nation.

In light of this major release, today’s ETF to watch will be the MSCI Switzerland Index Fund (EWL). This fund is designed to measure the performance of the Swiss equity market and is home to over $550 million in total assets. Top holdings of EWL include big names like Nestle and UBS, though the fund has a tilt towards the health care sector. If GDP results come in low for the day, look for EWL to take a hit, but a surprise could make for a lucrative session for this fund. Also, remember that the outlook given may be just as important as the GDP result itself when it comes to the reaction of markets and this ETF [see also First Trust Rolls Out 7 New AlphaDEX ETFs].

Disclosure: No positions at time of writing.