Swiss Market Index

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Swiss Market Index
Swiss Market Index.png
SMI performance between 1988 and 2012
Foundation 30 June 1988
Operator SIX Swiss Exchange
Exchanges SIX Swiss Exchange
Constituents 20
Type Large cap
Market cap CHF 1,145 billion (full, end 2017)[1]
Weighting method Market value-weighted
Related indices SMI MID, SMI Expanded
Website six-swiss-exchange.com

The Swiss Market Index (SMI) is Switzerland's blue-chip stock market index, which makes it the most important in the country. It is made up of 20 of the largest and most liquid Swiss Performance Index (SPI) large- and mid-cap stocks. As a price index, the SMI is not adjusted for dividends, but a performance index that takes account of such distributions is available (the SMIC - SMI Cum Dividend).

The SMI was introduced on 30 June 1988 at a baseline value of 1500 points. Its composition is examined once a year. 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.

The securities contained in the SMI currently represent approximately 80%[1] of the entire Swiss equity market capitalisation, as well as of 90% trading volume[citation needed] of all 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 underlying index for numerous derivative financial instruments such as options, futures and index funds (e.g. ETFs).

Rules[edit]

Acceptance criteria[edit]

To be accepted into the SMI, a given issue must meet stringent requirements with regard to liquidity and market capitalisation. On one hand, it must represent at least 50% of the average liquidity of the SPI constituent issues and, on the other, have a minimum free-float capitalisation equal to 0.45% or more of the entire SPI capitalisation. Moreover, trading volume and capitalisation are the determining factors in the quarterly rankings. The composition of the index is reviewed annually on the third Friday in September.

2007 restructuring[edit]

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. The ranking as of 30 June 2007 (according to average capitalisation and the turnover achieved during one year, i.e. from 1 July 2006 through 30 June 2007) determined which companies would remain within the SMI. On 5 July 2007, SWX announced that Ciba Specialty Chemicals, Lonza Group, Givaudan, SGS and one of the two classes of shares of Swatch Group would leave the SMI as of 24 September 2007 leaving 20 securities in the index.[2]

2017 introduction of capped weightings[edit]

In 2017, in order to address the issue that the top three constituents (Nestlé, Roche, Novartis) account for more than 60% of the index capitalization, SIX Swiss Exchange changed the rules of the SMI to introduce capped weighting.[3] 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 (intra-quarter breach), 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.


Constituents[edit]

Current constituents[edit]

Distribution of SMI expanded index firms by canton of HQ
Distribution of SMI expanded index market capitalization by canton of HQ

As of June 2018, the following 20 stocks make up the SMI index.[4]

Company Logo ICB Sector Canton Ticker symbol
ABB ABB logo.svg electronic and electrical equipment Zurich ABBN
Adecco business training and employment agencies Zurich ADEN
Credit Suisse Credit Suisse Logo.svg banks Zurich CSGN
Geberit building materials and fixtures St. Gallen GEBN
Givaudan Givaudan SA Logo.jpg specialty chemicals Geneva GIVN
Julius Baer Group Julius Baer.svg banks Zurich BAER
LafargeHolcim LafargeHolcim logo.svg building materials and fixtures St. Gallen LHN
Lonza Lonza.svg pharmaceuticals and biotechnology Basel LONN
Nestlé food products Vaud NESN
Novartis Novartis-Logo.svg pharmaceuticals Basel NOVN
Richemont Richemont.svg clothing and accessories Geneva CFR
Roche Hoffmann-La Roche logo.svg pharmaceuticals Basel ROG
SGS business support services Geneva SGSN
Sika Logo Sika AG.svg specialty chemicals Baar SIKA
Swatch Group clothing and accessories Bern UHR
Swiss Life life insurance Zurich SLHN
Swiss Re reinsurance Zurich SREN
Swisscom fixed line telecommunications Bern SCMN
UBS banks Zurich UBSG
Zurich Insurance Group Zurich Insurance Group logo.svg full line insurance Zurich ZURN

Changes in constituents[edit]

2009[edit]

In September 2009, Nobel Biocare and Bâloise were replaced with Lonza Group and SGS.[5]

2011[edit]

In September 2011, Lonza Group was replaced with Givaudan.[6]

2012[edit]

In June 2012, Synthes was replaced with Geberit following the merger with Johnson & Johnson.[7]

2016[edit]

In January 2016, Transocean was replaced with Swiss Life.[8]

2017[edit]

In May 2017, Lonza Group was added back to the SMI to replace Actelion after its purchase by Johnson & Johnson.[9] In the same month, Sika AG replaced Syngenta after its purchase by ChemChina.[10]

See also[edit]

Notes and references[edit]

  1. ^ a b "SMI Family – Factsheet" (PDF). SIX Swiss Exchange. Retrieved 27 June 2018. 
  2. ^ "SWX Indices: Adjustments to SMI, SMIM and SLI composition and SPI Small/Mid/Large breakdown" (PDF) (Press release). SWX Swiss Exchange. 2007-07-05. Retrieved 2007-07-18. 
  3. ^ "Rules Governing The SMI Index Family" (PDF). SIX Swiss Exchange. Retrieved 2018-06-25. 
  4. ^ "SMI® PR". SIX Swiss Exchange. Retrieved 2016-12-03. 
  5. ^ "SIX Swiss Exchange Indices: Adjustments to SMI®, SMIM® and SLI® composition and SPI® small/middle/large breakdown" (PDF). SIX Swiss Exchange. Retrieved 2018-06-24. 
  6. ^ "Index adjustments on the occasion of the ordinary index review" (PDF). SIX Swiss Exchange. Retrieved 2018-06-24. 
  7. ^ "Index adjustments on the occasion of the delisting of Synthes N" (PDF). SIX Swiss Exchange. Retrieved 2018-06-29. 
  8. ^ "Index adjustments in conjunction with delisting of Transocean Ltd" (PDF). SIX Swiss Exchange. Retrieved 2018-06-27. 
  9. ^ "Index adjustments in conjunction with the takeover of Actelion Ltd" (PDF). SIX Swiss Exchange. Retrieved 2018-06-24. 
  10. ^ "Index adjustments in conjunction with the takeover of Syngenta AG" (PDF). SIX Swiss Exchange. Retrieved 2018-06-24. 

External links[edit]