Money Flows Out of Swiss-Focused ETFs

NEW YORK (TheStreet) -- A total of $272 million flowed out of Swiss holdings held by 247 exchange traded funds traded in the U.S. in the week through Tuesday. The biggest holes were in financial stocks, $241 million, industrials, $31 million, and health care, $14 million.

The problem area in Switzerland's financial industry is located in investment banking and brokerage, according to data provided by Marco Polo XTF. iShares MSCI-Switzerland ( EWL), iShares MSCI Europe Financials Sector Index Fund ( EUFN), BLDRS Europe 100 ADR ( ADRU) and SPDR S&P International Financial Sector ETF ( IPF) have large Swiss investment-banking and brokerage holdings, and ought to be avoided until fund flows reverse.

Likewise, pharmaceuticals are having an adverse reaction in Swiss health care. Add SPDR S&P International Health Care Sector ETF ( IRY), WisdomTree Intl Healthcare ( DBR) and iShares S&P Global Healthcare Sector ( IXJ) to the list of funds to avoid.

The environmental and recycling industry is polluting the industrial sector this week, with WidsomTree Intl Industrials ( DDI) and SPDR S&P International Industrial Sector ETF ( IPN) the most exposed funds.

The benchmark Swiss Market Index is the worst performer among major global indices this month. The SMI has risen 2.1%, less than half the pace of the second-worst performer in Europe, the U.K.'s FTSE-100. The Swiss franc has strengthened against the euro amid Greece's debt woes, making Swiss exports less competitive. Switzerland's exports account for most of the country's economy.

The rest of Europe is struggling as general strikes in Greece protest that country's austerity measures designed to get its fiscal house in order. Leading the ETF outflows, the Netherlands' component of 208 funds shrank by $61 million, 228 French and 159 Italian portions of ETFs drained $13 million, while 192 German and 181 Spanish ETFs lost $10 million.

Instead of Europe, your best bet may be the United States of America, where ETF inflows to 680 funds totaled $3.2 billion. Canada had a good week, with $272 million flowing into 229 funds.

On the global-commodity front this week, $167 million went to gold ETFs, $77 million to petroleum, $16 million to platinum and $67 million out of silver funds.

For the best-rated exchange traded funds, check out our Top ETFs page.

-- Reported by Kevin Baker in Jupiter, Fla.

Kevin Baker became the senior financial analyst for TSC Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering mutual funds. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.

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