SMI - Market Performance and Analysis in 2024 (2024)

The Swiss Market Index (SMI) is one of the most followed and largest stock market indices in Europe, representing the 20 largest companies listed in Switzerland. It plays a crucial role in assessing the economic health of the country and serves as a benchmark for investors around the world. This article examines in detail the live price of the SMI index, how it works, its calculation method, its importance, its historical performance, and the different ways to invest in this index. We will also analyze the composition of the index, highlighting the companies that constitute it.

SMI Index Live Price

What is SMI (Swiss Market Index)?

The Swiss Market Index (SMI) is the flagship index of Swiss stock exchange, launched in 1988. It is made up of the 20 largest Swiss market capitalizations, representing approximately 90% of the total market capitalization of the Swiss market. This index is a key indicator of the performance of Swiss companies, covering diversified sectors such as finance, pharmaceuticals, consumer goods, and more.

Performance of the SMI Index

The SMI has seen positive performance over the past few years. In 2023, the index gained 10,45% and since the start of 2024, it has increased by 5,23%. This performance is due to a number of factors, including strong growth in the Swiss economy, low interest rates and strong corporate profits.

How to Invest in the Swiss Market Index?

There are several ways to invest in the Swiss Market Index. Investors can:

• Buy the shares that make up the SMI. This will allow them to benefit directly from the performance of Swiss companies in stock Exchange. However, this approach can be risky because it involves selecting individual stocks.
• Trading CFDs (Contracts for Difference). CFDs are financial derivative instruments that allow investors to speculate on the value of the SMI without having to purchase the underlying shares. CFDs can be an effective way to profit from short-term market movements.
• Investing in index funds who follow the SMI. Index funds are professionally managed baskets of stocks. They offer investors a diversified way to invest in SMI with minimal investment.

Composition of the SMI

1. ABB LTD N
2. LONZA N
3. SONOVA N
4. ALCON N
5. PARTNERS GROUP N
6. KUEHNE+NAGEL INT N
7. SWISS LIFE HOLDING AG N
8. GEBERIT N
9. RICHEMONT N
10. UBS GROUP N
11. GIVAUDAN N
12. SWISS RE N
13. LOGITECH N
14. HOLCIM N
15. ROCHE GS
16. SWISSCOM N
17. NESTLE N
18. NOVARTIS N
19. SIKA N
20. ZURICH INSURANCE

How the Swiss Market Index works

The SMI works by grouping the top 20 Swiss companies based on their market capitalization and liquidity. The index is reassessed periodically to reflect changes in company values ​​and ensure that it remains representative of the Swiss market. Stocks are weighted by their free float-adjusted market capitalization, meaning only stocks available for public trading are considered.

Calculation of the SMI Index

The SMI index is calculated using a market capitalization weighting method. Each company in the index is assigned a weight based on its market capitalization, adjusted for float. The formula for calculating the index is as follows:

The formula for calculating the SMI is as follows:

• SMI = Σ (Share price ix Market capitalization i) / Divisor

Where:

• Stock price i is the stock price of company i
• Market capitalization i is the market capitalization of company i
• Divider is a correction factor which allows the value of the index to be maintained over time

The divisor is adjusted whenever a company is added or removed from the index, or when there is a significant change in a company's market capitalization.

Importance of SMI

The SMI plays a crucial role in the Swiss economy and for international investors. Here are some reasons why SMI is important:

1. Economic Barometer: The SMI is a key indicator of Switzerland's economic health. Fluctuations in the index reflect the performance of major Swiss companies and, by extension, the country's economy.
2. Investment Guide: The SMI serves as a benchmark for investors wishing to assess the performance of Swiss equities. It is used as a benchmark for investment funds and portfolios.
3. Confidence Indicator: Movements in the SMI may indicate investor confidence in the Swiss economy. A rising SMI suggests increased confidence, while a decline may indicate economic concerns.
4. Diversification: Investing in SMI allows investors to diversify their portfolio with companies from various sectors, thereby reducing risks specific to a single company or industry.

Conclusion

The Swiss Market Index (SMI) is a pillar of the Swiss economy and a valuable tool for investors. Following the course live, understanding how it works, its calculation method, and its economic importance are essential to taking advantage of this index. With varied investment options, whether through direct purchase of shares, CFD trading, or futures, investors can gain exposure to the performance of some of the world's strongest and most innovative companies. The SMI continues to represent an attractive investment opportunity for those looking to diversify their portfolios and capitalize on Switzerland's economic stability.