Nestlé, Novartis and Roche – this trio epitomises the Swiss economy like no other. This dominance has always been reflected in the composition of the Swiss Market Index, or SMI for short. Between them the three heavyweights make up almost 48% of the lead domestic index at the moment. That means the SMI is not the best representative of the Swiss equity market – and the editorial team of “Finanz und Wirtschaft” (FuW) have never made a secret of this assessment. However, the cluster risk posed by the Nestlé-Novartis-Roche triumvirate is not the only concern held by the editors of the biggest-selling business paper in Switzerland. “Another factor is that 20 shares is far too few to achieve balanced diversification,” wrote FuW editor-in-chief Jan Schwalbe at the end of November 2022 about the number of index components.
The criticism did not end there. Three years ago, partly also on the back of considerable feedback from private investors and investment professionals, the publication responded by launching the FuW Swiss 50 Index. According to the initiators, this benchmark does not allow any dramatic overweighting of just a few sectors and their shares. It does so on the basis of a stringent selection process. To make it into the index universe, a share must reach a daily trading volume of at least CHFmn 5 over a period of six months prior to the cut-off date. In the next step, all stocks meeting the formal criterion are sorted according to their market capitalisation (free float). Those shares coming in the top 50 places on this list are included in the FuW Swiss 50 Index.
The next step is the weighting. The shares in the first 25 places of the ranking are each given a weighting of 2.7%, while those in the lower half of the table go into the FuW Swiss 50 Index with a 1.3% weighting. This practice results in much greater diversification. Not only that, but this barometer contains 30 more Swiss companies than the SMI, which “only” has 20 shares. The greater spread is not just evident in the individual stocks, though: the FuW Swiss 50 Index also stands out when it comes to the sectors represented. It covers 13 branches of the economy, three more than the SMI does. With a combined weighting of almost one fifth, Swiss industrial companies set the tone. As in the SMI, health and consumer goods play a leading role. However, these two sectors are far less prominent (see graph).
The structure of the FuW Swiss 50 Index does not, of course, make it immune to general market trends. In 2025 stock markets were bedevilled by US trade policies. First, president Donald Trump slammed the brakes on the markets at the beginning of April with the announcement of extensive special tariffs. In August he doubled down on his efforts with regard to Swiss exports to the United States, imposing a particularly high import duty of 39%. As is well known, Berne and Washington recently reached agreement on a memorandum of understanding on trade policy which essentially provides for a cut in tariffs to 15% and significant investment by Swiss businesses in the USA. The precise details and the final agreement have still to be negotiated. With that in mind, it was hardly surprising that the tariff deal did not meet with a storm applause on the Swiss stock market. In mid-November, nevertheless, the FuW Swiss 50 Index reached an all-time high in its net total return variant. It did lose some ground compared to the SMI TR Index in 2025, but in the long term the FuW concept continues to have a clear edge (see graph). In view of the upcoming negotiations with the USA, uncertain economic prospects and lack of clarity on the course of US monetary policy, the diversification could make more sense than ever next year. Reflecting the Swiss equity market in its entirety, that is exactly what the FuW Swiss 50 enables.
Source: FuW, Leonteq AG, as at November 2025
Source: Reuters; as at 21.11.2025. Past performance is not a reliable indicator of future performance.