SMI performance between 1988 and 2012
|Foundation||June 30, 1988|
|Operator||SIX Swiss Exchange|
|Exchanges||SIX Swiss Exchange|
|Type||Large-cap, price index|
|Market cap||CHF 1,145 billion (full, end 2017)|
|Related indices||SMI MID, SMI Expanded, SPI 20, SPI, SLI|
The Swiss Market Index (SMI) 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 (SPI) 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.
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 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, and as the underlying index for numerous derivative financial instruments such as options, futures, index funds (e.g. ETFs) and structured products.
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 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 capitalization equal to 0.45% or more of the entire SPI capitalization. Moreover, 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. 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.
As of September 23, 2019, the following 20 stocks make up the SMI index.. All components are large-caps (SPI Large), except one marked as 1, which is a mid-cap (SPI Middle). This is because liquidity is a criterion of inclusion, in addition to capitalization. The weights are given as of August 2019.
|Company||ICB Sector||Canton||Ticker symbol||Weight (%)|
|ABB||electronic and electrical equipment||Zurich||ABBN||3.61|
|Adecco1||business training and employment agencies||Zurich||ADEN||0.95|
|Geberit||building materials and fixtures||St. Gallen||GEBN||1.77|
|LafargeHolcim||building materials and fixtures||St. Gallen||LHN||2.44|
|Lonza||pharmaceuticals and biotechnology||Basel||LONN||2.81|
|Richemont||clothing and accessories||Geneva||CFR||4.42|
|SGS||business support services||Geneva||SGSN||1.36|
|Swatch||clothing and accessories||Bern||UHR||0.92|
|Swiss Life||life insurance||Zurich||SLHN||1.74|
|Swisscom||fixed line telecommunications||Bern||SCMN||1.34|
|Zurich Insurance||full line insurance||Zurich||ZURN||5.76|
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 (SMIC), which takes into account dividend distributions. 
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.
|Calibration||1,500.00||June 30, 1988|
|Minimum (all times)||1,287.60||January 14, 1991|
|Maximum (all times)||10,098.59||September 11, 2019|
|Maximum drawdown||-56.3% (8,412 to 3,675.43)||July 21, 1998 to March 12, 2003|