The Swiss Market Index (SMI) has been regarded as representative of the Swiss equity market ever since the barometer was launched on 1 July 1988. The long-established top dog also has its faults, however, because the SMI is dominated by the globally active food and pharmaceuticals giants. Calculated since the end of 2022, on the other hand, the FuW Swiss 50 Index provides a more realistic picture of the Swiss stock market. For one thing, the benchmark contains the 50 most liquid domestic securities, which makes it much more diversified than the SMI. For another, the rule-based index must be reviewed twice a year, in May and November, when the weightings are reset, or rebalanced, in order to reduce the risk of clustering.
The most recent review, using the relevant stock market data of 9 April, led to some weighting changes. While Lindt & Sprüngli and Schindler rose from 1.3% to 2.7%, the influence of Logitech and VAT Group declined from 2.7% to 1.3%. The experts at FuW don’t just look at the weighting, though: the composition is also put under the microscope on the observation days. This means there will be another refresh soon. The shares of Comet, Clariant and Tecan, which have posted sharp losses of between 26% and 36% over the last six months, will have to leave the index. Their places will be taken by Allreal, Cembra Money Bank and Banque Cantonale Vaudoise (BCV). The change will be made after the market closes on 7 May.
The upcoming ascent of Allreal, Cembra Money Bank and BCV comes on the back of strong performances. Bucking the market as a whole, all the members of this trio have recorded double-digit percentage growth this year alone. Of the three, Cembra Money Bank has its nose in front with a rise of 22%. Its strong performance goes hand in hand with good operational figures: the provider of small loans grew its net profit by 8% in the last financial year. The pace could pick up even further in 2025, with the management holding out the prospect of a 14% to 15% increase. While BCV had to absorb a slight drop in profits last year after a record-breaking 2023, shareholders will still be rewarded with a higher dividend thanks to its solid business performance overall. The inclusion of the two financial institutions in the FuW 50 Index increases the influence of the banking sector, currently in third place, on the barometer. Healthcare and industrial goods take the top two positions. At 21.5%, healthcare stocks have a much smaller weighting than they do in the SMI, at 35.5%. Cyclical industrial goods, on the other hand, make up almost twice as much of the share basket, at 18.6%, as they do of the SMI.
The exchange traded product (ETP+) on the FuW Swiss 50 Index NTR makes diversification easy. The certificate enables 1:1 participation in the potential of the Swiss equity market. Less an annual fee of 0.72%, the ETP+ fully reflects the performance of the widely diversified barometer. The net dividends paid by the index members are included in the calculation. Given the lack of term limit, investors have flexibility when it comes to choosing their investment period. Traded daily on the stock market, the ETP+ on the FuW Swiss 50 Index is thus an effective and low-cost investment product with really exciting price opportunities. The ETP+ also comes with an additional protective function: 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 the issuer 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, the respected ratings agency Fitch puts the long-term issuer default rating for Leonteq at “BBB”.
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.