The Swiss Market Index, or SMI, is a blue-chip stock market index comprising the 20 largest and most liquid companies listed on the SIX Swiss Exchange. As a barometer of the Swiss economy, the SMI offers investors exposure to some of the world's most stable and innovative corporations.
It currently represents over 90% of the entire market capitalisation and 90% of the trading volume of all Swiss and Liechtenstein equities listed on the SIX. There are various sectors in the index, with companies such as food giant Nestle, healthcare firm Novartis, luxury goods business Richemont, and banking group UBS just some of the well-known companies included.
Unlike some indices weighted by price, the SMI, which was launched in June 1988, is market-capitalisation-weighted. As the Six Group website states: “The index composition is fixed to 20 shares which are weighted by their free-float market capitalisation and a capping is applied at 18% for single components.”
Today's Chart & Movers
While the SMI has performed well over the past year and the year-to-date, it has yet to recover from its decline in 2022. However, looking back through the price chart, large dips in the SMI have shown to take some time to recover.
Swiss Market Index – Daily Movers
SMI Forecast
Whether you’re investing in stocks, bonds, or other assets, it’s crucial to weigh both the upside and downside potential. For the Swiss SMI Index, here are the bull and bear arguments:
The Bull Argument: The Swiss economy's strength, political stability, and neutrality are often seen as supportive factors for the SMI. Additionally, the pharmaceutical and healthcare sectors, which are key components of the index, often provide consistent growth and stability. In a February 2024 article, analysts at eToro said the Swiss stock market is “supersized, increasingly attractive, and due a catch-up.” They noted that the SMI was still (as it is today) off its all-time highs, lagging the records in the US, Japan, and Europe’s Stoxx 600.
The Bear Argument: While Switzerland has a relatively insulated economy, it's not entirely immune to global economic downturns. Rising interest rates can impact the Swiss economy and stock market, particularly sectors sensitive to interest rate changes. Increased regulatory pressures, particularly in the banking sector, could also pose risks to certain SMI components. Furthermore, consumer staples are a large part of the index, so an economic downturn that sees consumers reign in spending could also weigh on the SMI.
The Swiss Market Index, as a barometer of the Swiss economy, is often seen as a stable and reliable investment. However, it's not entirely immune to global economic factors and geopolitical events.
Swiss Market Index (SMI) Top 10 Companies
The SMI's composition is reviewed once a year, usually on the third Friday of September. There are various Swiss companies to invest in, but those with the largest market cap are worth paying attention to.
| Company | Market Cap (Q4 2024) |
|---|---|
| Nestle | €246.58 Billion |
| Roche | €242.32 Billion |
| Novartis | €217.68 Billion |
| Chubb | €100.46 Billion |
| ABB | €93.89 Billion |
| UBS | €89.80 Billion |
| Compagnie Financiere Richemont | €83.85 Billion |
| Zurich Insurance Group | €75.39 Billion |
| Holcim | €48.00 Billion |
| Sika | €45.47 Billion |
Top 5 Constituents
The Appeal of The SMI Index
The Swiss Market Index (SMI) offers a unique investment profile compared to other markets, making it appealing to certain types of investors.
Investors seeking exposure to the Swiss economy will, of course, find the SMI a suitable choice. Switzerland's strong economic fundamentals, political stability, and neutrality provide a favourable investment environment.
Dividend income seekers may also find the SMI attractive. Many SMI companies have a history of consistent dividend payments, making the index a potential source of regular income. Defensives healthcare and consumer staples stocks make up a significant portion of the index. As a result, it has an above-average dividend yield.
Long-term investors who prioritise stability and resilience may consider the SMI. The index has historically demonstrated its ability to weather economic storms. While the growth may be slow, the SMI has performed well over the years.
Risk-managed investors seeking a balance between growth and risk management may want to take a further look at the SMI. While not entirely immune to volatility, the SMI is generally considered less volatile than smaller-cap indices.
Investors prioritising quality and stability over high growth potential may find the SMI a good fit. The index is composed of well-established, financially sound companies with strong market positions.
Indices – Daily Movers