ETF Boom in Switzerland: What to Look for When Choosing an ETF

ETFs are more popular than ever before. But while more people are investing, many still lack a basic understanding of how to choose the right ETF. This article explores why ETFs are booming and what you should look for when selecting one.

ETFs (Exchange-Traded Funds) are no longer a niche investment product. They have firmly entered the mainstream.

In Switzerland alone, the number of ETF investors has grown significantly in recent years. Since 2022, the number has increased by approximately 89%, representing annual growth of around 24%. Today, about 35% of people in Switzerland already invest in ETFs. Over the next 12 months, an additional 310,000 investors are expected to enter the market.

One particularly notable trend: women are rapidly closing the investing gap. Since 2022, the number of female ETF investors has grown by 122%.

(Source: BlackRock People & Money Study)

Understanding Switzerland's Growing Investment Landscape

The growth is impressive, but it highlights an interesting challenge.

Less than half of Swiss respondents say they have a basic understanding of ETFs. In fact, 55% report that they have either never heard of ETFs or have heard of them without understanding how they work.

Even among those who invest in ETFs, confidence remains limited. Understanding does not automatically translate into confidence when making investment decisions.

Only 13% say they have a solid understanding and feel comfortable making ETF investment decisions, while just 5% report having advanced ETF knowledge.

(BlackRock data provided to Watson upon request)

Why ETFs Are Growing So Rapidly

ETFs align perfectly with today's investment environment.

They are:

• Easy to access
• Low cost
• Suitable for investing small amounts
• Highly diversified

Most importantly, they fit into an increasingly digital and automated world.

For many investors, getting started no longer means making a large one-time investment. Instead, they invest regularly through ETF savings plans.

Of course, ETFs also have limitations:

• No opportunity to outperform the index they track
• Concentration risks when certain regions or companies dominate an index (for example, the high U.S. weighting in many global ETFs)
• No active selection of individual companies
• Exposure to market volatility and fluctuations

Nevertheless, investing is no longer reserved for the wealthy. It has become accessible to a much broader population.

ETF Savings Plans: Changing How People Invest

A major driver behind ETF growth is the rise of ETF savings plans.

Across Europe, more than 15 million ETF savings plan transactions are now executed every month. By 2030, this number is expected to grow by approximately 255%.

(Source: extraETF.com)

Instead of investing a lump sum, many investors are choosing consistency.

This approach offers several advantages:

• Investing becomes structured and predictable
• Emotions play a smaller role
• Barriers to entry are significantly reduced

ETF savings plans are particularly well suited for people who are new to investing, want to build wealth over the long term, and prefer a simple investment structure.

The Most Popular ETFs

According to the study The ETF Savings Plan in Continental Europe 2025, the following indices are among the most popular:

MSCI World Index

Approximately 1,300 large and mid-sized companies across 23 developed markets.

S&P 500

500 leading U.S. companies representing around 80% of the U.S. stock market.

MSCI Emerging Markets IMI

Large, mid-sized, and small companies across 24 emerging markets.

MSCI ACWI

Around 3,000 companies from developed and emerging markets worldwide.

STOXX Europe 600

600 companies across 17 European countries.

As ETF investing continues to grow, questions around concentration risk naturally arise.

According to Marco Strohmeier, Head of Wealth Management for German-speaking Switzerland at BlackRock

The Challenge Today: Selection, Not Access

Access to investing has never been easier.

Choosing investments, however, has never been more complex.

Globally, there are estimated to be around 14,000 ETFs. By the end of 2025, more than 2,000 ETFs were listed on the Swiss stock exchange.

This variety creates both opportunity and complexity.

Different providers.

Different strategies.

Many products that appear similar but behave quite differently.

For investors building their own portfolios, the number of options can quickly become overwhelming.

5 Essential Features to Consider in an ETF

You do not need complex financial models to identify suitable ETFs.

Here are five key factors to consider.

1. The Index: What Are You Actually Investing In?

An ETF is only as good as the equity index it tracks.

The key question is:

What do you actually own?

A MSCI World ETF contains more than 1,000 companies from developed countries.

An S&P 500 ETF focuses exclusively on the 500 largest U.S. companies.

Both offer diversification, but their exposures are very different.

Always review the ETF factsheet, paying attention to:

• Country allocation
• Sector allocation
• Industry exposure
• Largest holdings

Useful ETF research platforms include:

• justETF
• extraETF
• Swiss Fund Data

2. Costs: Small Numbers, Big Impact

Costs are one of the most important factors in long-term investing.

The Total Expense Ratio (TER) shows the annual cost of owning an ETF.

While cost differences may seem small, they can have a significant impact over decades.

In Switzerland:

• Broad market ETFs often have TERs between 0.09% and 0.30%
• Specialized ETFs may cost between 0.40% and 1.00%

3. Replication Method: How Does the ETF Track the Index?

ETFs generally use one of two approaches:

Physical Replication
The fund directly owns the underlying securities.

Synthetic Replication
The fund uses derivatives to replicate index performance.

Both approaches are valid.

Many investors prefer physically replicated ETFs because they directly hold the underlying assets and offer a high degree of transparency.

4. Fund Size and Liquidity

Larger ETFs often benefit from:

• Lower costs
• Greater liquidity
• Higher trading volumes

As a rule of thumb, many investors look for funds with at least CHF 100 million in assets under management.

That said, smaller ETFs can still be attractive, particularly when accessing niche or emerging investment themes.

5. Provider: Experience Matters

Not all ETF providers are equal.

Large providers typically offer:

• Extensive experience
• Economies of scale
• Well-established operational structures

Among the world's largest ETF providers are:

• iShares (BlackRock)
• Vanguard
• State Street Global Advisors
• Invesco
• Amundi
• Xtrackers
• UBS Asset Management

Final Thoughts

The ETF boom is real.

New developments such as active ETFs and increasingly specialized investment strategies are likely to continue reshaping the market.

For investors, this creates more opportunities than ever before—but also more responsibility when selecting investments.

The good news is that choosing a suitable ETF does not require expert-level knowledge. By focusing on the index, costs, replication method, fund size, and provider, you can make more informed decisions and build a portfolio aligned with your long-term goals.

Do you already invest in ETFs? And if so, how consciously do you make your ETF selection decisions?

Sources

BlackRock Swiss Report (People & Money Study):
https://www.blackrock.com/ch/individual/en/insights/investor-insights-and-trends

ETF Savings Plan Study – Continental Europe (extraETF):
https://extraetf.com/de/wissen/etf-sparplan-markt-kontinentaleuropa

Global ETF Market Estimate:
https://www.blackrock.com/sg/en/ishares/education/types-of-etfs#:~:text=With%20over%2014%2C000%20ETFs1,ETF%20is%20right%20for%20you.

ETFs Listed on the Swiss Exchange (SIX) as of 2025:
https://www.six-group.com/en/newsroom/news/the-swiss-stock-exchange/2026/etf-market-report-2025-q4.html

Largest ETF Issuers Worldwide:
https://www.investopedia.com/articles/investing/080415/5-biggest-etf-companies.asp

ETF Issuers Ranking List:
https://etfdb.com/etfs/issuers/#issuer-power-rankings__aum&sort_name=expenses_position&sort_order=asc&page=1