The CHF/USD exchange rate just hit another all-time high, and Swiss investors are scrambling. Your portfolio statement shows those US tech giants, NVIDIA, Apple, Microsoft, delivering eye-watering returns, but every dollar they generate is worth less when converted back to francs. Enter the UBS MSCI World ex USA ETF, launched in February 2025, waving the seductive promise of global diversification without the USD baggage. The product has performed surprisingly well in its first year, leading many to wonder: is this finally the tool to decouple from the dollar?
Not so fast. The uncomfortable reality is that most investors fundamentally misunderstand what creates currency exposure in their portfolios. Buying an "ex USA" index might scratch an emotional itch, but it barely moves the needle on actual USD risk.
The ETF That Promises Less America
The logic seems bulletproof. Standard MSCI World ETFs concentrate roughly 70% of holdings in US stocks, creating what amounts to an accidental US overweight position. The UBS MSCI World ex USA (ticker: EXUS, traded in CHF) simply removes that allocation, leaving you with developed markets from Europe, Japan, Canada, and Australia. You get 1,300+ stocks, geographic balance, and, most importantly, you’re no longer betting on the US economy.
Or are you?
The product’s marketing materials emphasize its CHF trading currency and Swiss-domiciled structure, subtle cues that resonate with investors nervous about USD strength. But here’s where the narrative starts to crack: the currency of a stock’s listing tells you almost nothing about its actual economic exposure.
The Revenue Reality Check
A commenter on a Swiss finance forum recently dismantled this misconception with surgical precision. Take Nestlé, they argued, a Swiss company headquartered in Vevey, traded in CHF, the epitome of "non-US" investment. Yet over a third of Nestlé’s revenue originates from North America, and nearly all its commodity contracts are USD-denominated. In practice, Nestlé’s costs and profits are heavily tied to dollar fluctuations.
Flip the script. Google and Apple are US-headquartered, USD-listed stocks that dominate conventional MSCI World indices. But more than half of Google’s revenue comes from outside the US, and Apple generates approximately 60% of its sales internationally. Their costs, however, are largely USD-based. The net currency exposure becomes a complex calculation of revenue geography minus cost structure, something a simple "ex USA" filter completely ignores.
If you bought Nestlé’s US-listed ADR (NSRGY) in dollars, what currency exposure would you actually have? The answer: almost identical to buying the SIX-listed shares in CHF. The arbitrage mechanisms in global markets ensure that currency differences get priced out almost instantly. This is why the entire premise of reducing USD risk by avoiding US-listed stocks collapses under scrutiny.
Hedged ETFs: The Actual Solution (With Its Own Problems)
If you genuinely want to neutralize USD exposure, there’s a proven tool: currency-hedged ETFs. Products like the iShares MSCI World CHF Hedged UCITS ETF use forward contracts to strip out currency fluctuations, leaving you with pure equity performance. For Swiss investors specifically worried about CHF strengthening against USD, this approach directly addresses the problem rather than dancing around it.
But hedging isn’t free. The roll costs of currency forwards typically add 0.15-0.30% in annual expenses, and you sacrifice the natural diversification benefit that multiple currencies provide. During periods when CHF weakens, hedged positions underperform. Plus, in your Säule 3a (third pillar) retirement account, many hedged products face availability constraints and higher fees.
The debate between hedged and unhedged positions has no universal answer. It depends on your time horizon, spending currency in retirement, and view on long-term CHF strength. What we can say definitively: currency hedging trade-offs for Swiss investors matter far more than whether you buy the US or ex-US version of an index.
The Valuation Question: Are US Stocks Actually Overpriced?
The second pillar supporting the "ex USA" argument points to US tech valuations. With NVIDIA trading at 35x forward earnings and the Nasdaq’s concentration in a handful of mega-caps, diversifying away seems prudent. European and Japanese markets appear cheaper on virtually every metric, price-to-earnings, price-to-book, dividend yield.
This reasoning has merit, but it conflates two separate decisions: currency exposure and valuation timing. If you believe US stocks are overvalued, the logical move is to underweight US equities based on fundamentals, not to buy an ex-US product hoping for incidental currency benefits. You’re making an active sector call, not a currency hedge.
Many German-speaking investors have already reached this conclusion independently. Forum discussions reveal a growing trend: stopping new purchases of MSCI World and redirecting fresh capital to Europe-focused ETFs. The motivation is valuation-driven, not currency-driven. They recognize that shifting away from globally weighted US-heavy ETFs represents a strategic portfolio choice, not a currency management tool.
Swiss Investor Implications: What Should You Actually Do?
Let’s get practical. The UBS MSCI World ex USA ETF isn’t a bad product, it’s a precise tool for a specific job. If you want to reduce US equity exposure because you’re concerned about concentration risk or stretched valuations, EXUS delivers exactly that. Its CHF listing and Swiss UCITS structure provide tax efficiency and convenience.
But if your primary concern is the CHF/USD exchange rate punishing your portfolio, this ETF barely helps. You’ll still own companies with massive USD revenue exposure. You’ll still watch your returns fluctuate with dollar strength. The only way to truly isolate yourself from USD movements is hedged products or shifting into Swiss franc-denominated assets like Swiss real estate or SPI ETFs, which introduces its own home bias problems.
The uncomfortable truth: USD strength and Swiss investor currency concerns can’t be solved through clever ETF selection alone. They require either accepting currency volatility as the price of global diversification, or paying for explicit hedging.
The 70% Problem No One Talks About
Here’s what makes this discussion genuinely spicy: the entire premise of global investing for Swiss residents is built on a contradiction. We preach diversification, but most Swiss investors already live a CHF-denominated life. Your salary, mortgage, and daily expenses are in francs. Your pension from AHV/AVS (Old Age and Survivors’ Insurance) will be in francs. From a pure risk management perspective, you should actually want foreign currency exposure to hedge against Swiss economic downturns.
The real question isn’t "how do I reduce USD risk?" but "how much CHF concentration can I tolerate?" Viewed through this lens, avoiding home bias in favor of global diversification becomes the more sophisticated strategy. Your "currency problem" might actually be your portfolio’s strength.
Performance Data: Too Early to Judge
The UBS ETF’s first-year performance surprised early adopters, but twelve months of data proves nothing. The MSCI World ex USA index has existed for decades, and its long-term track record shows periods of both outperformance and underperformance relative to the full MSCI World. Without the US tech rocket fuel, the index delivered more modest but steadier growth.
What matters for Swiss investors is the CHF-adjusted return. When you strip out the currency effect, the performance differential between hedged and unhedged ex-US strategies becomes the key comparison point. Unfortunately, most product marketing focuses on the headline number, not the risk-adjusted reality.
Bottom Line: Use the Right Tool for the Job
Stop asking whether UBS MSCI World ex USA "reduces USD exposure." Start asking two separate questions:
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Do I want less US equity exposure? If yes, EXUS or similar products like Vanguard’s VEA do exactly that. Make this decision based on valuation views and diversification needs, not currency fears.
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Do I want less currency volatility? If yes, look at hedged ETFs or accept that global investing means living with exchange rate fluctuations. No free lunch exists.
The investors who get burned are those making emotional decisions at CHF/USD extremes. When the franc peaks, they panic into ex-US products, only to miss the rebound when sentiment shifts. The disciplined approach involves setting a strategic allocation, perhaps 60% global (including US) and 40% ex-US, and rebalancing mechanically.
If you’re sitting on a large cash position waiting to deploy, the current environment presents genuine challenges. Investing large sums despite market highs requires accepting that perfect timing is impossible. Dollar-cost averaging into a balanced allocation beats paralysis every time.
The UBS MSCI World ex USA ETF deserves a place in your toolkit, but not as a currency hedge. Use it to express a view on US valuations. Use it to broaden your geographic base. Just don’t expect it to protect your portfolio from the next big USD move, that’s a job for entirely different instruments.
