With the fate of the Euro and the threat of widespread contagion spreading throughout the European Union, investors have the right to be cautious about the continent. Although initial reaction to the proposed $1 trillion "nuclear option" bailout was quite positive, this has since faded as investors once again started raising concerns about the emergency funds. For investors still wanting to play the region and skip places like Spain (NYSE:EWP) - or the United Kingdom (NYSE:EWU) for that matter - you do have a choice in a small, but stable, country located in the Alps.

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Small, But Economically Powerful
With only a population of 7.2 million residents and an area of only 15,940 sq. miles, Switzerland is an international powerhouse that could be what investors want in a Europe play. Typically seen as a safe haven during periods of both financial and political strife, the nation prides itself on the oldest and strongest democratic governments - in this case more than 500 years old. The nation's hallmarks are a strong currency, low foreign debt and an abundance of gold reserves. Nearly 40% of Switzerland's of gross domestic product is attributed to global exports and the nation runs a trade surplus. Some of the world's largest pharmaceutical, engineering and food producers call the nation home.

Compared to its European peers, Switzerland experienced a moderately mild recession with unemployment in the nation only reaching a high of 4.4% in December of 2009. The economy there has quickly recovered, buoyed by demand for products from such companies as electrical firm ABB Limited (NYSE:ABB). High personal savings rates, low sovereign debt risk and limited exposure to the plagued Euro make the nation an ideal spot for a play on the continent.

A Canton Portfolio
While investing in Switzerland isn't without risk. The global crisis revealed that Swiss banks UBS (NYSE:UBS) and Credit Suisse (NYSE:CS) are a major part of the Swiss economy. Adding an allocation to the Alpine nation in a portfolio can give access to Europe without many of the EU's problems. As the world's third major financial center behind New York and London, there are plenty of options for adding that allocation.

The easiest and most liquid way is through the iShares MSCI Switzerland ETF (NYSE:EWL). The exchange traded fund follows 38 Swiss firms with nearly 43% of its holdings in food giant NESTLE SA (OTCBB:NSRGY) and drug makers Novartis (NYSE:NVS) and Roche (OTCBB:RHHBY). While this high weighting may make some investors cringe, these three stocks represent sturdy companies with good earnings and strong dividends. The fund yields 1.37% and charges a 0.56% in expenses.

For investors wanting to add more of an actively manage portfolio equities, the closed end Swiss Helvetia Fund (NYSE:SWZ) offers a similar portfolio and returned 113% since inception in 1996 and March 31, 2010. The fund also adds a slight margin of safety, trading at 14% discount to its net asset value. The Swiss Helvetia fund currently yields 3.93%.

Investors also have the ability to play the safe haven Swiss Franc via the CurrencyShares Swiss Franc Trust (NYSE:FXF). While the dollar has strengthened in this time of crisis, sending the Franc downwards, the currency is typically seen as refuge in times of trouble. The Swiss Franc could see its star rise again as investors once again look for alternatives to the dollar.

Bottom Line
As the crisis within the European Union continues to intensify, investors may want to put Switzerland on their investing map. The nation's stable currency, low exposure to sovereign debt and strong exports could be just the Europe play investors want. Investors can add the Swiss economy through the previously mentioned funds or through stocks such as seed specialist Syngenta (NYSE:SYT), which trade as ADRs on the Big Board. (Learn more about ADR's in our ADR Basics Tutorial.)

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Tickers in this Article: EWL, SWZ, FXF, EWU, EWP, ABB, CS, UBS, NSRGY, NVS, RHHBY, SYT

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