Last year the editorial team of leading business paper “Finanz und Wirtschaft” created an index to represent the domestic equity market: the FuW Swiss 50 Index. It contains the 50 largest companies listed on the SIX Swiss Exchange according to the stock market value of the free-float stock. The members are divided into two segments and weighted equally, so that no preference is shown to large caps over smaller companies. This removes the possibility of clumping such as occurs on the SMI, for instance, where just three groups (Nestlé, Novartis, Roche) make up more than 50% of the weight. The rule-based barometer is reviewed twice a year, in May and again in November, when the weightings are recalculated to ensure balance and the components can also be replaced.
This week it was time once again to freshen up the FuW Swiss 50 Index. Alongside resetting the weightings to their nominal proportions, two replacements were made. Generics subsidiary Sandoz, a spin-off from Novartis, was briefly represented in the index with a small weighting following its IPO at the beginning of October, but now has to leave it again. The same fate was suffered by crisis-hit Meyer Burger, the solar company having lost more than half its market capitalisation in the last six months alone. The two free spaces have been taken up by Accelleron and Swissquote. The share price of the provider of turbochargers for heavy-duty applications recently bucked the negative trend with multiple highs, while Swissquote is also one of this year’s outperformers thanks to strong price gains. Following the takeover of Credit Suisse, its shares were added to the UBS stock in the FuW Swiss 50 Index, which meant that the weighting of the big bank jumped sharply. This was corrected in the rebalancing.
Leonteq offers an exchange traded product (ETP+) on the FuW Swiss 50 Index NTR. This allows full participation in the price opportunities presented by the Swiss equity market. The product reflects the performance of the broadly diversified barometer 1:1, adjusting for an annual fee of 0.72%. In return, the dividends paid flow into the calculation on a net basis. The product has no term limit and can be traded daily on the market.
The ETP+ on the FuW Swiss 50 Index not only represents an effective and low-cost investment product, but also offers an additional protective function thanks to specific collateralisation: a pledge is deposited with SIX SIS AG for every exchange traded product. If the price of the certificate rises, Leonteq increases the pledge – and vice versa. In the worst-case scenario, i.e. if Leonteq were to enter into payment difficulties, the trustee SIX Repo would sell the pledge and distribute the equivalent of the investment product to the holders of the ETP. Investors do not need to worry about the liquidity of Leonteq at the moment, though: on the contrary, a few days ago the respected ratings agency Fitch raised the long-term issuer default rating for Leonteq to “BBB” with a stable outlook.
We look forward to answering all of your questions about our products and how they are traded. Please don't hesitate to get in touch! Phone: 058 800 11 11, email info@leonteq.com or contact us here.