Swiss Market Index
The Swiss Market Index is Switzerland's blue-chip stock market index, which makes it the most followed in the country. It is made up of 20 of the largest and most liquid Swiss Performance Index stocks. As a price index, the SMI is not adjusted for dividends.
The SMI was introduced on June 30, 1988 at a baseline value of 1,500 points. It closed above the symbolic level of 10,000 points for the first time on July 2, 2019. On March 12, 2020, it reached the level corresponding to a bear market, having lost 20% from its previous peak above 11,000 points.
Its composition is examined once a year. Currently, it contains 19 large-caps and one mid-cap. Calculation takes place in real-time. As soon as a new transaction occurs in a security contained in the SMI, an updated index level is calculated and displayed. However, the index is updated no more than once per second. The SMI is calculated in Swiss Francs, the currency of the Swiss Confederation.
The securities contained in the SMI currently represent approximately 80% of the entire Swiss equity market capitalization, as well as 85% to 90% of the total trading turnover of Swiss and Liechtenstein equities listed on the SIX Swiss Exchange. Because the SMI is considered to be a mirror of the overall Swiss stock market, it is used as the benchmark for numerous mutual funds, index funds and ETFs, and as the underlying index for numerous derivative financial instruments such as options, futures and structured products.
In 2020, the SMI, along with other SIX indices, was endorsed under the EU Benchmarks Regulation and is registered with the European Securities and Markets Authority, which means that it can be used as an underlying for financial products sold in the EU.
Rules
Acceptance criteria
The underlying universe of the SMI, from which candidate constituents are selected, is the SPI. To be accepted into the SMI, a given issue must meet stringent requirements with regard to liquidity and market capitalization. On the one hand, it must represent at least 50% of the average liquidity of the SPI constituent issues. On the other hand, it must have a minimum free-float capitalization equal to 0.45% or more of the entire SPI capitalization. Thus, trading volume and capitalization are the determining factors in the quarterly rankings. The composition of the index is reviewed annually on the third Friday in September.Fixed number of 20 securities
The SMI comprises a fixed number of 20 securities as of the ordinary review date in September 2007. Prior to this date, the index contained 25 listings.Capped weightings
In 2017, in order to address the issue that the top three constituents account for more than 60% of the index capitalization, SIX Swiss Exchange changed the rules of the SMI to introduce capped weighting. The weight of any constituent in the SMI index can no longer exceed 18%.Readjusting any weight exceeding 18% down to that value is done, in principle, on a quarterly basis. However, whenever a constituent reaches a weight exceeding 20% during a quarter, then the weight is brought back to 18% without waiting for the next quarterly review.
To make the transition smoother, there was an initial transition period during which these changes were progressively implemented, in steps of at most 3% per quarter.
Additionally, a new index, the SPI 20, was created to continue indexing the 20 SMI constituents without any caps.
SMI constituents
Current constituents
As of March 23, 2020, the following 20 stocks make up the SMI index. The weights are given as of the same date.| Rank | Name | Industry | Weighting in % |
| 1 | Nestlé | Food | 18.36 |
| 2 | Novartis | Pharmacy | 17.74 |
| 3 | Hoffmann-La Roche | Pharmacy | 17.44 |
| 4 | Zurich Insurance Group | Insurance | 6.06 |
| 5 | UBS | Banks | 4.15 |
| 6 | ABB | Electrical equipment | 4.03 |
| 7 | Richemont | Luxury Goods | 4.00 |
| 8 | Lonza | Chemistry | 3.60 |
| 9 | Givaudan | Chemistry | 3.42 |
| 10 | Alcon | Pharmacy | 2.86 |
| 11 | Sika | Chemistry | 2.61 |
| 12 | Swiss Re | Insurance | 2.46 |
| 13 | Credit Suisse | Banks | 2.30 |
| 14 | LafargeHolcim | Building materials | 2.26 |
| 15 | Geberit | Sanitary engineering | 2.15 |
| 16 | SGS | Services | 1.93 |
| 17 | Swisscom | Telecommunications | 1.84 |
| 18 | Swiss Life Holding | Insurance | 1.25 |
| 19 | Swatch Group | Watches | 0.78 |
| 20 | Adecco | Services | 0.77 |
SMI family
SMI is also the name of a family of indices encompassing the SMI itself, but also the SMI MID with the next 30 large-caps and mid-caps, and the SMI Expanded with all 50 shares.The indices are available in several variations. For example, the SMI, which is a price index, also exists as a performance index, the SMI Cum Dividend, which takes into account dividend distributions.
History
Historical values
The following table shows the annual development of the Swiss Market Index since 1988.Milestones
The following table shows historic milestones of the Swiss Market Index. Latest seen values are not final: italic indicates that the value may be seen again if the bear market persists; parentheses indicate that the value will be seen again if we reenter a bull market ; Other values may be seen again in case of a crash.| Value | First seen | Latest seen | |
| Calibration | 1,500.00 | June 30, 1988 | February 2, 1991 |
| Minimum | 1,287.60 | January 14, 1991 | January 14, 1991 |
| Milestone | 2,000.00 | December 14, 1992 | December 14, 1992 |
| Milestone | 3,000.00 | January 5, 1994 | September 25, 1995 |
| Milestone | 4,000.00 | January 16, 1997 | March 14, 2003 |
| Milestone | 5,000.00 | May 5, 1997 | August 11, 2011 |
| Milestone | 6,000.00 | July 8, 1997 | June 29, 2012 |
| Milestone | 7,000.00 | February 25, 1998 | January 3, 2013 |
| Milestone | 8,000.00 | July 1, 1998 | December 9, 2016 |
| Milestone | 9,000.00 | January 12, 2007 | March 30, 2020 |
| Milestone | 10,000.00 | July 2, 2019 | June 16, 2020 |
| Milestone | 11,000.00 | February 6, 2020 | February 24, 2020 |
| Maximum | 11,263.01 | February 19, 2020 | |
| Maximum drawdown | -56.3% | July 21, 1998 to March 12, 2003 |