UBS ETF MSCI Switzerland 20/35 UCITS ETF Hedged to GBP
| Issuer: UBS |
| Asset Class: Equity |
| TER: 23bps |
| Trading Currency: GBX |
| Pays Income: False |
| Listing Date: 11 Jun 2015 |
| Ticker: UC94 |
| ISIN: LU1169830442 |
This fund offers targeted exposure to the Swiss equity market by tracking the performance of the MSCI Switzerland 20/35 Index. This benchmark captures the large and mid-cap segments of the market, representing a significant portion of Switzerland's publicly traded companies. The '20/35' constraint is a diversification rule mandated by UCITS, which limits the weight of the largest constituent to 35% and all other individual constituents to 20%. This structure provides broad exposure to Switzerland’s robust and highly developed economy, which is renowned for its world-leading companies in sectors such as pharmaceuticals, financial services, consumer goods, and precision manufacturing. The fund uses a full physical replication method, meaning it holds the actual stocks of the index, offering a high degree of transparency.
A key feature of this specific share class is its currency-hedging strategy. It is designed to minimize the impact of currency fluctuations between the Swiss Franc (CHF), the currency of the underlying assets, and the Pound Sterling (GBP), the trading currency of the share class. This is particularly advantageous for investors who want to isolate their returns to the performance of the Swiss equities themselves, without taking on the additional risk associated with foreign exchange movements. The hedging mechanism makes the investment more suitable for those whose primary portfolio currency is Sterling, providing a 'purer' form of exposure to the Swiss market's performance.
This product serves as an efficient and cost-effective core holding for investors seeking to add single-country diversification within Europe to their portfolios. It is well-suited for those with a long-term investment horizon who are bullish on the prospects of the Swiss economy and its corporate sector but wish to avoid currency volatility. The semi-annual distribution of dividends can also provide a source of income. By investing in this fund, one gains access to a stable and innovative market through a single, transparent, and liquid instrument designed to reduce the complexities and risks of direct international stock picking and currency management.
