Fresh starts on the stock market are rarely for romantic reasons. Much more often they are a response to shocks. And that is exactly the reason for the spring revision of the FuW 50 Index, which was completed after the close of trading on 7 May. It comes at a time when investors are reeling from shock after shock: first the tariff chaos from Washington under Donald Trump, then the energy shock of the Iran war, and most recently the question of whether the enormous AI investment of the hyperscalers will ever pay off. In this climate, the index revision feels like a demonstration of resilience, because in volatile phases what matters is not only which shares are held in a portfolio, but how dominant they are. The FuW 50 developed by the editorial team of the business paper “Finanz und Wirtschaft” was specifically designed as an alternative to a Swiss benchmark market that is too concentrated: away from the dominance of a few giants, as is the case with the SMI, towards a broader representation of the domestic equity market.
Although the FuW Swiss 50 Index had been developed by the “Finanz und Wirtschaft” experts back in 2021, it was only in April that the SIX added the SMI Equal Weighted as an alternative, equally weighted variant to its product range in order to reduce the concentration risks. While the weakness of the traditional SMI has been known for years, then, the stock exchange operator has only reacted now. This indicates that the FuW Swiss 50 Index was ahead of its time. To ensure it stays that way, the benchmark is regularly “dusted off”. The latest spring clean is particularly extensive, with four stocks being added: Allreal, Mobimo, Banque Cantonale Vaudoise (BCV) and Cembra Money Bank. All four start with a weighting of 1.3% each. Leaving the index, on the other hand, are Siegfried and Sunrise because they lack the size to remain in the index universe, while Amrize is dropping out because the Holcim spin-off will in future be classified as a US company with a secondary listing in Switzerland.
The mechanism behind the rebalancing is deliberately straightforward. It is not stories that determine inclusion, but clear rules: trading history, liquidity and free-float market capitalisation. The rules stipulate that a share must have reached a daily average trading volume of CHFmn 5 for the six months before the key date. Only then is it assigned to the two fixed weighting categories. This explains the index’s remarkable mobility, particularly in a market where individual stocks hover on the cusp between rising and falling. Apart from Mobimo, all the new entrants had previously been included in the FuW Swiss 50. The 25 bigger stocks are each weighted at 2.7%, the 25 smaller ones – to which the new quartet belong – at 1.3%.
This matrix is reset to the original target stocks twice a year, in May and November. The result, therefore, is not an index that simply tracks the market by size, but one that effectively ensures market breadth. That is precisely why for many investors it represents more than just an alternative to the SMI. A look at the performance history shows that this approach has paid off so far: the value of the index has more than doubled over a ten-year period.
Source: LSEG