You’re a Swiss retail investor with a tidy pile of VOO sitting in your Interactive Brokers account. Feels safe, right? The S&P 500, the world’s most liquid ETF, held through a reputable broker. But what if I told you that in a severe geopolitical crisis, that access could vanish overnight, not because of market risk, but because someone in Washington decided Swiss investors are no longer welcome?
This isn’t theoretical hand-wringing. We’ve seen the blueprint. When Russia invaded Ukraine in 2022, Russian retail investors woke up to find their foreign-held assets frozen, brokerage accounts locked, and dividend payments suspended. The question now circulating in Swiss investing circles is whether a deterioration in US-EU relations could trigger similar restrictions for European and Swiss investors.
The Russian Precedent: What Actually Happened
The 2022 sanctions package didn’t just hit oligarchs. It severed Russian investors’ access to foreign-domiciled assets across the board. Brokers complied with sanctions by freezing accounts, prohibiting new purchases, and blocking fund transfers. Even investors who held perfectly legal, pre-sanction positions found themselves trapped.
Swiss investors noticed. The concern isn’t about being the aggressor, Switzerland’s neutrality is constitutionally enshrined, but about getting caught in the crossfire. As one Swiss investor put it in a recent discussion: “I understand that such an extreme outcome is probably low, but given recent geopolitical developments, it cannot be considered zero.”
The mechanics are straightforward: US-domiciled ETFs like VOO operate under US law. If the US Treasury’s Office of Foreign Assets Control (OFAC) adds Switzerland or the EU to a sanctions program (or creates a new one), US brokers must comply. They’d freeze accounts, halt trading, and block redemptions. Your ownership rights become theoretical, legal, but practically unenforceable.
The Swiss ETF Landscape: Already Showing Stress Fractures
Here’s where it gets interesting. Swiss investors have been piling into US ETFs for years, drawn by low fees and broad diversification. But recent data suggests the romance is cooling. According to Vanguard’s latest figures, US equity ETFs saw net outflows of $1.2 billion in November 2025, a dramatic reversal from October’s $7.4 billion inflow.
Jonathan Decurtins, head of wholesale Switzerland and Liechtenstein at Vanguard, downplayed the shift: “Trotz ungewisser Marktlage investieren Anlegerinnen und Anleger weiterhin in Exchange Traded Funds, wenn auch etwas langsamer als in den vergangenen Monaten.” But the timing is curious. The outflows coincide with escalating US-EU trade tensions and mounting concerns about financial market fragmentation.
The Swiss security establishment is paying attention. The federal government’s latest security strategy explicitly warns that “Auf die USA sei nicht mehr vollumfänglich Verlass” (the US can no longer be fully relied upon). That’s diplomatic speak for “the Americans might screw us over.”
How Swiss Investors Access US ETFs, and Where It Breaks
Most Swiss investors access US ETFs through three channels:
1. Swiss banks offering US ETFs (with higher fees due to PRIIPs regulation)
2. International brokers like Interactive Brokers
3. EU-based platforms that passport into Switzerland
Each pathway has vulnerabilities. Swiss banks offering US ETFs already operate under EU’s PRIIPs regulation, which forced many US ETFs to create EU-domiciled share classes. But the underlying assets remain US-domiciled. If sanctions hit, the Swiss bank’s custodian in the US would freeze the assets.
Interactive Brokers, popular among cost-conscious Swiss investors, routes through its US entity for US market access. Your VOO shares are held in street name at the Depository Trust Company (DTC) in New York. If OFAC issues restrictions, IB must comply. They won’t care that you’re a dentist in Basel, not a Russian oligarch.
The EU-based route seems safer but isn’t. EU financial institutions are deeply integrated with US clearing systems. When the US sanctioned Russian banks, EU banks cut them off within days to avoid secondary sanctions. The same would happen to retail brokerage clients.
The Palantir Parallel: When Switzerland Said No to US Tech
Switzerland’s recent experience with Palantir reveals how Bern thinks about critical dependencies on US-controlled infrastructure. The Swiss army evaluated Palantir’s software for intelligence analysis and concluded the risks were unacceptable. The internal evaluation report, obtained by Republik magazine, stated bluntly: “Ein Abfluss von Daten aus den Palantir-Systemen technisch nicht verhindert werden könne” (a data outflow from Palantir systems cannot be technically prevented).
The federal government rejected Palantir, citing “digitale Souveränität”, digital sovereignty. The same logic applies to financial assets. If you can’t trust US software with sensitive data, should you trust US-domiciled assets with your retirement savings?
The parallel is instructive. Just as Palantir’s CEO Alex Karp shmoozed Swiss officials (he’s a regular Davos visitor), US financial institutions have deep relationships with Swiss banks. But when geopolitics overrides commerce, those relationships count for nothing. The US Treasury doesn’t call UBS for permission.
What Would Trigger Access Loss?
Three scenarios could freeze Swiss investors out of US ETFs:
Scenario 1: Direct Sanctions
The US sanctions Switzerland or the EU over a policy dispute (think: digital tax, crypto regulation, or neutrality violations). OFAC adds Swiss financial institutions to the SDN list. Game over.
Scenario 2: Capital Controls
A US financial crisis triggers emergency capital controls. The US blocks foreign redemptions of US assets to stabilize markets. Your VOO becomes a permanent guest in New York.
Scenario 3: Clearing System Lockout
The US weaponizes the dollar clearing system, forcing SWIFT to cut off Swiss banks that process US ETF transactions. The assets remain, but you can’t trade or transfer them.
Swiss security analysts consider these scenarios increasingly plausible. The federal security strategy notes that “In dieser Phase könnte Russland hybride Aktionen intensivieren und weitere Staaten in Europa angreifen” (in this phase, Russia could intensify hybrid actions and attack further European states). While focused on Russia, the assessment reflects a world where economic warfare is normalized.
The Legal Fiction of Ownership
Here’s the uncomfortable reality: owning US ETF shares doesn’t mean what you think it means. You own a beneficial interest in a security held in street name by a custodian. Your name isn’t on the share register, the custodian’s is. If the custodian can’t or won’t service your account, your ownership is worthless.
Swiss law recognizes this distinction. The Bundesgesetz über den Einsatz elektronischer Mittel zur Erfüllung von Behördenaufgaben (Embag) requires government software to be open source to prevent vendor lock-in. But there’s no equivalent for financial assets. Swiss investors are locked into US financial infrastructure with no fallback.
The Russian experience proves this. Foreign investors who held Russian ADRs saw them delisted and wiped out. Those who held shares directly on the Moscow Exchange kept their holdings. The structure mattered more than the economics.
Mitigation: What Swiss Investors Can Actually Do
So what’s a Swiss investor to do? The solutions aren’t perfect, but they’re better than nothing:
1. Domicile Diversification
Split your equity exposure between US, EU, and Swiss-domiciled ETFs. Consider Swissquote’s SMI ETF or UBS’s SPI ETF for domestic exposure. Yes, you’ll pay higher fees. That’s the insurance premium.
2. Direct Share Ownership
For large positions, consider direct share ownership through a Swiss bank’s custodial service. It’s more expensive but creates a direct legal relationship. The bank can’t freeze your Apple shares without a Swiss court order.
3. EU-Listed Proxy ETFs
Use EU-domiciled ETFs that hold US assets through a Luxembourg or Irish entity. These are still vulnerable but add a layer of EU legal protection. The US might sanction Switzerland, but sanctioning the entire EU is a bigger step.
4. Physical Gold (Seriously)
The Swiss tradition of holding physical gold in a bank vault exists for a reason. It’s the ultimate geopolitical hedge. Zürcher Kantonalbank still offers allocated gold accounts where you own specific bars.
5. Pressure Your Broker
Ask your broker (Swiss or international) about their sanctions contingency plans. If they can’t answer satisfactorily, that’s information too. Swiss brokers are regulated by FINMA and must have business continuity plans, ask to see them.
The Bigger Picture: Switzerland’s Vulnerability
The ETF access question is a microcosm of Switzerland’s broader geopolitical vulnerability. The country’s prosperity depends on open global markets, but the post-2016 world is fragmenting into competing blocs. The US-China trade war, Russia sanctions, and now US-EU tensions over digital regulation all threaten the Swiss economic model.
Christoph Mäder, president of Economiesuisse, acknowledged this in a recent interview: “Dazu kommen konjunkturelle Unsicherheiten und geopolitische Spannungen. Das alles bremst Investitionen.” He was talking about US tariffs, but the principle applies to financial assets too.
The Swiss government’s response has been to pursue “digitale Souveränität”, building independent capacity in critical areas. The NZZ editorial on this topic argued: “Die liberale Antwort auf geopolitische Risiken ist Mathematik, nicht Protektionismus.” For finance, that means diversification, not withdrawal.
Bottom Line: Hope for the Best, Plan for the Worst
Could Swiss investors lose access to US ETFs? Absolutely. The probability is low in any given year, but over a decades-long investing horizon, it’s non-trivial. The Russian precedent proves that when geopolitics escalates, financial markets become weapons.
Swiss investors face a particular dilemma. The country’s neutrality means it could be caught between blocs, not aligned with either side. The US might sanction Switzerland for continuing to trade with China, or the EU might pressure Switzerland to choose sides. In either scenario, US financial assets become leverage.
The outflows from US ETFs in November might be noise, or they might be early movers hedging tail risk. Smart Swiss investors are quietly diversifying, accepting higher fees and lower liquidity for the peace of mind that comes with not having all their eggs in the US basket.
Your VOO shares aren’t as safe as you think. But unlike Russian investors in 2022, you still have time to act. The SBB runs on time, until it doesn’t. Plan accordingly.
