Indices

Indices

Do you understand what stocks are, what opportunities and risks they offer?

What Is a Stock Index?

A stock index is a special form of stock market index that measures only the performance of shares. The companies included in the index are selected according to certain criteria, such as the size of the company or the trading volume. Stock indices give investors an overview of how well or poorly the stock markets or certain market segments are currently performing. A stock index thus helps to better understand the trends on stock markets and to serve as a benchmark for one's own investments.

An index such as the Swiss Market Index (SMI), for example, includes the 20 largest and most liquid companies in Switzerland and is considered the most important stock market barometer in Switzerland. In addition to the SMI, there are also other Swiss indices that track different segments of the market:

  • SPI (Swiss Performance Index): The most comprehensive Swiss stock index. It contains almost all companies listed on the SIX Swiss Exchange and thus reflects the overall development of the Swiss stock market.
  • SPI ESG (Swiss Performance Index ESG): A sustainable variant of the SPI. It includes companies from the SPI universe that meet certain environmental, social and governance (ESG) criteria. It thus offers orientation for investors who value responsible investing.
  • SMIM (Swiss Market Index Mid): This index comprises the 30 largest medium-sized companies that are not included in the SMI. It offers a broader view of the Swiss economy beyond the large corporations.
  • SPI Extra: Contains all SPI companies that are not represented in the SMI – i.e. small and medium-sized companies. It is well suited for the analysis of the so-called "second line" segment.

On the following page you will find an overview of other Swiss indices: Swiss Indices - Equity & Bond Indices | SIX

Well-known international examples are the IBEX 35 in Spain, the DAX in Germany, the S&P 500 in the USA or the Nikkei 225 in Japan. The movement of an index makes it easy to understand trends and sentiments on the stock market, as they represent the performance of a selected group of companies.

Since the summer of 2024, SIX has also been calculating international markets. These include, for example, the SIX Germany 40 for Germany, the SIX US 500 for the USA and the SIX Japan 225 for Japan. In addition to country-specific indices, SIX also measures world markets and regions, such as the SIX World All Country Index or the SIX World Emerging Markets Index.

On the following page you will find an overview of which global indices SIX calculates:
World Indices: Global Financial Market Insights | SIX

Index Types by Region or Theme

In addition to classic country indices such as the SMI (Switzerland), IBEX 35 (Spain), DAX (Germany) or S&P 500 (USA), there are numerous other indices that specifically track specific regions, industries or investment themes. These allow investors to invest in specific market segments in a targeted manner or to analyse them.

  • Regional indices: These indices group together companies from specific geographical regions. Examples include the MSCI Emerging Markets, which reflects the development of emerging markets, or the SIX EURO 50, which includes the 50 largest companies in the eurozone.
  • Industry indices: They focus on specific sectors of the economy. One example from Switzerland is the SIX Special Industry Life Sciences Index, which includes companies from the fields of biotechnology and medical technology. The STOXX Europe 600 Technology, for example, which bundles European technology companies, is internationally renowned.
  • Sustainability indices: These indices take into account environmental, social and governance (ESG) criteria. They offer guidance for responsible investors. Examples include the SPI ESG in Switzerland or the MSCI ESG Leaders Index, which includes companies worldwide with particularly good ESG ratings.

Such thematic and regional indices enable portfolios to be targeted – whether for diversification, to focus on future topics or to take ethical investment criteria into account.

Price and Performance Index

In the case of stock market indices, it is crucial whether they only reflect price changes or also take into account income such as dividends – depending on the case, one speaks of a price index or a performance index.

Price Index (Price Return)

A price index only measures the price changes of the securities it contains – dividends or other income are not taken into account. It thus shows how pure market prices are developing. One example of this is the SMI PR (Swiss Market Index Price Return), which tracks the price movement of the 20 largest Swiss companies without including distributions.

Performance Index (Total Return)

A performance index takes into account both price changes and dividend payments, assuming that these  are reinvested. This shows the total return for investors. A typical example is the SPI TR (Swiss Performance Index Total Return), which includes almost all Swiss equities and shows the actual performance including income.

How Can I Invest in Indices?

It is not possible to invest directly in an index, as an index is merely a statistical measure. However, there are financial instruments that track the performance of an index and thus enable investment. The best known and easiest option is ETFs (exchange-traded funds). These exchange-traded funds buy the stocks that are included in the index and thus track its performance very accurately. ETFs offer broad diversification and are often cost-effective, making them attractive to many investors. With an ETF on an index such as the SMI or MSCI World, you can invest in many companies at the same time and spread your risk.

Discover our universe of around 1,600 ETFs or observe market movements.

Pioneer in ETF trading | SIX