The SMI Expanded Index is a Swiss stock market index combining both large-cap and mid-cap companies, offering a broader view of Switzerland’s equity market. It includes the 20 largest companies from the Swiss Market Index (SMI) along with the 30 mid-sized firms from the SMI Mid (SMIM), creating a benchmark of Switzerland’s top 50 listed companies.
By including mid-cap stocks, the SMI Expanded provides investors with greater diversification than the SMI alone, as mid-sized firms typically exhibit stronger growth potential but also higher volatility. The inclusion of mid-cap stocks adds an element of agility and innovation to the index. The index is market-capitalisation-weighted.
The index captures both the stability of blue-chip names and the growth opportunities presented by mid-sized firms in industries such as healthcare, industrials, financial services, and consumer goods. It was launched in 2004.
SMI Expanded Index Performance
Unlike the SMI Mid Index, which includes only mid-caps, the SMI Expanded has experienced solid growth this year, primarily thanks to the defensive qualities of the large-cap Swiss stocks in the index. Large-cap stocks in the index provide stability, while the mid-cap components generally tend to outperform during periods of economic expansion.
| Period | Performance (as of 28/02/2025) |
|---|---|
| 1-year | +12.76% |
| 3-years | +1.44% |
| 7-years | +4.75% |
| 15-years | +4.46% |
SMI Expanded Index Top 10 Companies
The top 10 stocks make up 71.61% of the total index weighting.
| Company | Weight (% as of 28/02/2025) |
|---|---|
| Nestle | 14.43% |
| Roche | 13.29% |
| Novartis | 12.62% |
| Richemont | 6.24% |
| UBS | 5.97% |
| Zurich Insurance | 5.49% |
| ABB | 4.87% |
| Holcim | 3.38% |
| Swiss RE | 2.68% |
| Alcon | 2.63% |
Large and Mid-Cap Swiss Stocks Forecast
The Bull Argument: Investing in mid and large-cap Swiss equities provides investors with a blend of established market leaders and high-growth mid-sized firms. While large-cap stocks offer stability and consistent dividends, mid-cap companies often experience faster earnings growth and greater market share expansion. Mid-cap companies in Switzerland’s industrial, technology, and healthcare sectors have been expanding into new international markets, benefiting from global demand for high-quality Swiss goods and services.
Some bullish analysts have pointed to strong earnings growth among Swiss mid-cap stocks, with several outperforming larger firms in revenue expansion and profitability. As global economies recover, many believe that mid-sized firms will capture more growth opportunities, while adding established names to a portfolio is seen as a way to provide balance and an element of risk management.
The Bear Argument: Despite their growth potential, mid-cap stocks also come with increased risk, which is seen by some as a bearish factor. This is because smaller companies are typically more affected by economic slowdowns and industry shifts, and the current environment has recently resulted in more risk-off flows from global investors. Mid-cap firms often lack the financial resources and global diversification of large multinationals, making them more vulnerable to market downturns, supply chain disruptions, and inflationary pressures. While Switzerland’s blue-chip stocks have strong defensive characteristics, mid-cap companies are less shielded from external economic shocks.
The current macroeconomic and geopolitical climate, with tariffs being implemented and threatened by the US Government, may provide cause for concern when considering stocks that may be seen as more risky. If the Swiss economy faces a slowdown, mid-cap companies could see slower growth or margin compression, making them less attractive to investors seeking stability.
Our View: While there are various bearish points that investors should consider, investing in a blend of mid-cap and large-cap Swiss equities should provide investors with a more well-balanced portfolio.
Who Should Invest in Swiss Large and Mid-Cap Stocks
While ETFs tracking the SMI Expanded Index are hard to come by, investors can look at the iShares SMIM ETF, which tracks the SMIM and provides exposure to Swiss mid-cap stocks, and the iShares SMI ETF, which tracks the SMI index and provides exposure to the 20 largest Swiss companies.
The ETFs cater to a range of investors looking to gain broad Swiss market exposure beyond just the largest blue-chip stocks.
Growth-Focused Investors: Adding a mid-cap component introduces higher growth potential. This is suitable for those looking for expanding companies with strong earnings potential.
Balanced Investors: In addition, investing in a combination of large and mid-cap stocks provides a diversified investment approach that offers stability and growth.
Risk-Tolerant Investors: However, given that mid-sized companies tend to be more volatile, investors should be willing to withstand short-term fluctuations for potential long-term gains.
Diversification Seekers: Finally, investors looking to broaden their exposure to the Swiss stock market beyond just the largest corporations may benefit from adding exposure to mid-cap stocks.
