Swiss Stock Market Indices Compared

There are many different indices that aim to represent the Swiss stock market in whole or in part. This moneyland.ch guide explains the most important Swiss stock market indices.

Which indices track the Swiss stock market?

There are numerous indices that partially or fully replicate the Swiss stock market. The most famous are the Swiss Market Index (SMI) and the Swiss Performance Index (SPI).

• The MSCI Switzerland, which is published by US financial services provider MSCI, covers the 45 biggest stocks with primary listings on the SIX Swiss Exchange (SIX). The index is meant to serve as a benchmark of Swiss large-cap and mid-cap stocks. The weighting of stocks in the MSCI Switzerland index is based on free float – the market capitalization of publicly-traded shares. There is also an alternative version of the MSCI Switzerland, the MSCI Switzerland 20/35. This index limits the weighting of the biggest stock to a maximum of 35 percent of the index and the weightings of all other stocks to a maximum of 20 percent. But because there are no stocks that surpass these thresholds, in practice the two indices are largely identical.
• The Solactive Swiss Large Cap Index is made up of the 20 biggest Swiss stocks. It is published by German financial services provider Solactive. The selection and weighting of stocks is based on free float market capitalization.
• The Swiss Leader Index (SLI) is comprised of the 30 biggest Swiss stocks – the 20 stocks included in the SMI, plus the ten biggest stocks in the SMIM. The weighting of the four biggest stocks is restricted to a maximum of nine percent per stock. Each of the remaining stocks cannot make up more than 4.5 percent of the index. Stocks may temporarily exceed these thresholds, but weightings are adjusted regularly. This makes the SLI an alternative to the SMI, which is marked by a strong focus on just a few stocks (the five largest stocks make up more than 70 percent of the SMI).
• The Swiss Market Index (SMI) is considered to be the leading Swiss stock market index. It includes the 20 biggest companies listed on the SIX Swiss Exchange based on free float market capitalization. The weighting of individual stocks is limited to 18 percent. You can find detailed information in the moneyland.ch guide to the SMI.
• The Swiss Market Index Mid (SMIM) is made up of the 30 biggest Swiss mid-cap stocks. Large-cap Swiss stocks are excluded. Stocks are selected and weighted based on the market capitalization of their free float. Because the SMIM tracks mid-size companies, it only represents around 12 percent of the entire Swiss stock market when measured by market capitalization.
• The Swiss Performance Index (SPI) is the second-best-known Swiss stock market index, after the SMI. It includes more than 200 companies, including the 20 SMI stocks, and represents more than 99 percent of the Swiss stock market’s free float market capitalization. You can find detailed information in the guide to investing in the SPI. There are also a number of SPI sub-indices: The SPI 20 includes the 20 most heavily weighted SPI stocks, but unlike the SMI, there are no limits on how heavily any one component can be weighted. The SPI Extra deliberately excludes the 20 largest companies and concentrates on stocks with small or mid-sized market capitalization. You can learn more about the SPI Extra in the guide to the SPI. The SPI Mid includes the 80 biggest mid-cap stocks in the SPI. The SPI Select Dividend 20 is focused on dividend stocks, and tracks the 20 stocks with the highest dividend returns (as a percentage). The UBS 100 index tracks the 100 biggest SPI stocks.

Table 1: Overview of the most important Swiss stock market indices (sorted by their share of total market capitalization)

Information is shown as provided by publishers. Date: April 12, 2024. *As per the factsheet of the UBS ETF (CH) SPI Mid (CHF) A-dis (Date: February 2024).

The indices included in the table above are generally published in both price index and performance index versions. Price indices do not account for dividends, while performance indices do. All of the indices are published by SIX, except for the MSCI Switzerland and the Solactive Swiss Large Cap Index.

How can I invest in Swiss stock indices?

Investing in Swiss stock indices is relatively simple. The easiest and most cost-effective way is to buy shares in an exchange-traded fund (ETF) or an index fund that replicates your preferred index. These investment funds are normally passively managed funds that invest in the stocks behind an index with the aim of replicating the index’s performance as precisely as possible. The main difference between these two types of funds is that index funds are not traded on stock exchanges, while ETFs are.

All you need in order to buy ETF shares is a stock brokerage account from a bank. Alternatively, you can also invest in ETFs using neobanks like Yuh and Neon, but the selection of ETFs and stocks is limited.

Other options for investing in Swiss stock indices include buying shares in the underlying stocks yourself, or using tracker certificates or actively managed mutual funds that track your preferred index.

Which ETFs can I use to invest in Swiss stock market indices?

Investors in Switzerland can choose between many different Swiss stock index ETFs.

Table 2: Selection of ETFs that track Swiss stock market indices

Date: April 12, 2024.

Good to know: When investing in Swiss stocks, it is advisable to use ETFs that are domiciled in Switzerland. That guarantees that you can reclaim the withholding tax deducted from dividend payments in full.

Which fees occur when using ETFs?

The ongoing fees charged by the ETF itself collectively make up the total expense ratio (TER). On top of the TER, there are also stock brokerage fees and custody fees. These vary depending on which bank you use for investing. Regardless of which Swiss bank you use to invest in ETFs, you will always pay Swiss stamp taxes.

Which index funds can I use to invest in Swiss stock market indices?

There are many different index funds track the indices published by SIX. You can buy shares in an index fund directly from the fund’s manager. All of the funds listed in Table 3 are domiciled in Switzerland.

Table 3: Selection of index funds that track Swiss stock market indices

Daten gemäss Anbietern. Stand: 12.04.2024.

How well do Swiss stock market indices perform?

A 10-year performance comparison of Swiss price indices shows that the SPI Extra has performed the best (see Table 4). But when you compare performance indices – which account for dividends as well – the SLI comes out on top.

Table 4: Swiss stock market index performance comparison

Sources: SIX / Investing.com. Data is based on prices and performance without accounting for inflation or investment costs. The time frame for performance figures is April 11, 2014 until April 11, 2024.

It is important to note that performance figures can differ depending on which time frame is used. Additionally, past performance is not an indicator of future price developments. There are many different factors that can influence returns, and it is impossible to accurately predict future performance in advance. Theoretically, it is possible to lose a large part of your investment capital at any time. The risk is much higher if you only invest in a few individual stocks. The risk is lower when you invest in a diversified portfolio of stocks (using an ETF, for example).

What should I pay attention to when choosing a Swiss stock index?

There is no one index or indices that are best for all investors across the board. Which Swiss stock index is right for you depends on which stocks you want to invest in, and which investment strategy you use.  

In order to diversify your investments, it can be beneficial to invest in two indices: One index that tracks large-cap stocks, and a second index that is focused on companies with smaller market capitalization. Smaller-cap stocks are often underrepresented. Most indices, including the SMI, the SPI, and the MSCI Switzerland, are dominated by the biggest Swiss stocks like Nestlé, Novartis, and Roche. Examples of Swiss stock indices in which smaller companies play a more substantial role include the SMIM, the SPI Extra, and the SPI MID. The performance comparison (Table 4) also shows that indices that focus on smaller stocks delivered the best performance over a 10-year term.

Once you have settled on one or more indices, the next step is to find the right ETF or index fund to invest with. The moneyland.ch checklist for choosing the right ETF offers useful tips.

Disclaimer: The information provided in this article is for educational purposes only, and should not be perceived as investment advice.

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