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The SMI® stock exchange barometer is celebrating its 20th year of existence. The Swiss Market Index (SMI®) was published for the first time on 30 June 1988 at an initial level of 1500 points.
As a blue-chip index, the SMI® is Switzerland’s most recognised stock index. It reflects the price action of the 20 largest and most liquid shares included in the Swiss Performance Index (SPI®) and represents roughly 84% of the entire free-float capitalisation of the Swiss equity market.
As a result of the establishment of the Swiss Options and Financial Futures Exchange (SOFFEX) in 1986, a neutrally compiled real-time stock index was called for. The former Association of Swiss Stock Exchanges therefore resolved to develop a proprietary index family from which, in addition to the SPI®, the SMI® also emerged. The SMI® hit the ticker for the first time on 30 June 1988 and included a total of 24 Swiss blue-chip stocks.
Since then, the SMI® has evolved into being Switzerland’s most important securities exchange barometer, very successfully represents the country’s stock market throughout the world, and acts as the underlying instrument for numerous highly liquid and tradable structured and standardised financial products.
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The chart above illustrates the eventful history of the SMI® over the past 20 years. Over that time frame, the appreciation in value of the SMI® corresponds to an average annualised return of approximately 8%. Not included is the dividend yield, because the SMI® is calculated as a price index.
More information on the Swiss Market Index can be accessed via the SWX Website at: http://www.swx.com/trading/products/indices/stock_indices/smi_indices_en.html
