Swiss Market Index

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.

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.

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.

Distribution of SMI expanded index firms by canton of HQ

Distribution of SMI expanded index market capitalization by canton of HQ

As of September 23, 2019, the following 20 stocks make up the SMI index.[2] All components are large-caps (SPI Large), except one marked as ¹, which is a mid-cap (SPI Middle).[6][7] This is because liquidity is a criterion of inclusion, in addition to capitalization.[1] The weights are given as of August 2019.

The ranking as of 30 June 2007 (according to average capitalization 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 after the number of issues was changed to 20. 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.[8]

In September 2009, Nobel Biocare and Bâloise were replaced with Lonza Group and SGS.[9]

In June 2010, Swiss Life was replaced with Transocean.[10]

In September 2011, Lonza Group was replaced with Givaudan.[11]

In June 2012, Synthes was replaced with Geberit following the merger with Johnson & Johnson.[12]

In January 2016, Transocean was replaced with Swiss Life.[13]

In May 2017, Lonza Group was added back to the SMI to replace Actelion after its purchase by Johnson & Johnson.[14] In the same month, Sika AG replaced Syngenta after its purchase by ChemChina.[15]

In June 2018, Sika announced a 1:60 stock split.[16] Before this change, it was the SMI constituent with the highest price per share.

In April 2019, Julius Bär was replaced with Alcon after a spin-off (5:1) from Novartis.[17]

The following table shows the annual development of the Swiss Market Index since 1988.[18]

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 (-20% from the peak) persists; parentheses indicate that the value will be seen again if we reenter a bull market (maximum value reached again); Other values may be seen again in case of a crash (assuming a threshold of -50%).