Swiss Performance Index (SPI)

The Swiss Performance Index (SPI) is the broadest and most comprehensive stock market index for Switzerland. Think of it as the ultimate report card for the Swiss stock market. Operated by the SIX Swiss Exchange, the SPI tracks the performance of nearly all publicly traded Swiss companies, including small, medium, and large corporations. This makes it a much wider barometer of the Swiss economy than its more famous cousin, the SMI (Swiss Market Index), which only focuses on the 20 largest and most liquid stocks. The “P” in SPI stands for “Performance,” which is a crucial detail: the index calculation assumes that all dividends and capital gains are reinvested. This gives investors a true picture of the total return they would have earned by owning the entire Swiss market, making the SPI an essential tool for understanding the real performance of Swiss equities.

The SPI isn't just a list of stocks; it's a carefully constructed mirror of the Swiss market. Its design reveals why it's such a powerful indicator.

Unlike indexes that cherry-pick the biggest names, the SPI aims for complete coverage. If a company is listed on the SIX Swiss Exchange and meets basic criteria (like having at least a 20% free float), it's generally included. This “all-in” approach means the SPI captures the dynamism of smaller, innovative companies alongside established giants like Nestlé, Roche, and Novartis. It's a capitalization-weighted index, so larger companies naturally have a bigger impact on its movement, but the presence of smaller players provides a more balanced and realistic view of the market's health.

Many famous indexes, like the US S&P 500 in its main reporting, are “price indexes” – they only track changes in stock prices. The SPI, however, is a “performance index” (also known as a total return index). This is a massive advantage for investors.

• Price Index: Imagine you own a stock that goes from €100 to €105. A price index shows a 5% gain.
• Performance Index: Now imagine that same stock also paid a €3 dividend. A performance index adds that dividend back in, showing a total return of (€105 - €100 + €3) / €100 = 8%.

By automatically including reinvested dividends, the SPI shows the true, compounded growth of an investment in the Swiss market over time.

For many, the Swiss Market Index (SMI) is the Swiss market. But for a savvy investor, understanding the difference between the SPI and the SMI is crucial.

• The SMI: This is Switzerland's blue-chip index, containing about 20 of the largest and most traded stocks. It's like the Dow Jones Industrial Average of Switzerland—a snapshot of the titans of industry. It's heavily concentrated in three sectors: healthcare, consumer staples, and financials.
• The SPI: This is the whole shebang. With over 200 constituents, it's the Wilshire 5000 of Switzerland—a view of the entire publicly traded landscape. It offers far greater diversification across different company sizes and industries.

Relying only on the SMI is like judging the health of a forest by looking only at the ten tallest trees. The SPI lets you see the entire ecosystem.

Beyond being a trivia night tidbit, the SPI is a powerful tool for the value-oriented investor.

The world's attention is on the 20 companies in the SMI. This means the hundreds of small and mid-cap companies in the broader SPI often receive less analyst coverage and media hype. For a value investor, less attention can mean more opportunity. These “forgotten” stocks are precisely where you might find a fantastic business trading at a discount to its intrinsic value. The SPI is your map to this hunting ground.

If you invest in Swiss stocks, what should you measure your success against? Beating the concentrated, big-company-driven SMI might be easy in a year when smaller companies are soaring. But beating the SPI? That means you've truly outperformed the entire Swiss market. The SPI is the most honest benchmark for any Swiss equity strategy.

You don't have to buy all 200+ stocks to get exposure to the SPI. Several low-cost ETFs (Exchange-Traded Funds) are designed to track the SPI's performance. Buying a share in one of these ETFs is a simple and efficient way to own a slice of the entire Swiss economy, achieving instant diversification. This is a classic “buy the haystack” strategy, which can be a fantastic core holding for any long-term investor.