How to invest in Swiss Market index funds in 2024

Find out how to invest in the Swiss Market index, learn which trading platforms have the lowest fees, and what’s easiest for beginners.
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Updated: May 12, 2023
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It only takes a few minutes to invest in the Swiss Market index. One of the simplest and most popular ways to invest is to buy shares in a Vanguard Swiss Market ETF through an online trading platform.

Where can I invest in the Swiss Market index?

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According to our expert research, Plus500 is the best ETF broker to invest in Swiss Market index funds. 

Both Swiss Market Index ETFs and Swiss Market Index CFDs are available to invest in through Plus500 .

Here are three more places to buy the Swiss Market Index, ranked according to their cost, security, and features.

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1
Min. Deposit
$ 100
Best offer
User Score
10
Trade +2000 CFDs on Shares, Options, Commodities & more
Unlimited risk-free Demo Account
0 commissions & attractive spreads with up to 1:5 leverage
Start Trading
Payment Methods:
American Express, Apple Pay, Bank Transfer, Credit Card, Debit Card, Discover, Google Pay, Mastercard, PayPal, SEPA, Trustly, Visa, , skrill
Full Regulations:
ASIC, FCA, FSA, MAS, cysec-250-14-regulator, isa-regulator

Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

2
Min. Deposit
$ 10
Best offer
User Score
9.9
Up to $240 bonus!
Deposit with ACA, Wire, Pay with my bank
Invest for dividends and get payout on stocks on Ex-Dividend day
Start Trading
Payment Methods:
Bank Transfer, Credit Card, Debit Card, PayPal, Wire Transfer
Full Regulations:
CySEC, FCA

eToro offers real assets only, no CFD products. eToro securities trading offered by eToro USA Securities, Inc. (‘the BD”), member of FINRA and SIPC. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Invezz.com is not an affiliate and may be compensated if you access certain products or services offered by the BD.

3
Min. Deposit
$ 0
Best offer
User Score
9.6
Get insights from millions of investors, creators, and analysts
Build your portfolio of stocks, ETFs, and crypto–all in one place
No minimum deposit
Start Trading
Payment Methods:
Bank Wire, Check, Debit Card, Wire Transfer
Full Regulations:
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How do I invest in the SMI index?

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The easiest way is to sign up to a stock broker, open an investment account, and buy shares in an Swiss Market Index ETF or CFD. This guide explains how to do it:

Step 1. Sign up to Plus500

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We recommend using Plus500 to invest in Swiss Market Index. Sign up for a brokerage account and deposit some money. You may need to supply a form of photo ID to verify the account.

1
Min. Deposit
$ 100
Best offer
User Score
10
Trade +2000 CFDs on Shares, Options, Commodities & more
Unlimited risk-free Demo Account
0 commissions & attractive spreads with up to 1:5 leverage
Start Trading
Payment Methods:
American Express, Apple Pay, Bank Transfer, Credit Card, Debit Card, Discover, Google Pay, Mastercard, PayPal, SEPA, Trustly, Visa, , skrill
Full Regulations:
ASIC, FCA, FSA, MAS, cysec-250-14-regulator, isa-regulator

Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Step 2. Decide how to buy Swiss Market Index

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This boils down to choosing between an Swiss Market Index ETF or CFD. ETFs are generally better suited to investors who want to passively track the Swiss Market Index’s performance. CFDs offer a greater range of trading options: you can use leverage, short the index, or buy and sell it outside of trading hours.

Step 3. Invest in the Swiss Market Index

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Sign into your trading account and search for the Swiss Market Index. Hit the ‘buy’ button and enter the details of your purchase, such as how much you want to spend. Hit ‘buy’ again to execute the trade.

Step 4. Monitor your investment

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When you buy a CFD, the trade goes through more or less instantly, and you’ll be able to see your new open position in your trading account. ETF purchases can take longer, and if you buy outside of traditional trading hours it won’t go through until the next morning.

Your trading account will show the price change in the Swiss Market Index since you bought it, so you can see your profit/loss at a glance. Use that information, along with your own research, to decide when to sell the Swiss Market Index and close your position, ideally at a profit!

The different ways to invest in the SMI

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As we mentioned above, there are numerous ways to put your money into the Swiss Market Index. ETFs and CFDs are the simplest options for beginners, but there are alternatives. Here’s a brief overview of each option and who it’s best suited for.

Swiss Market Index ETFs

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An ETF (exchange-traded fund) is an investment fund traded on a stock exchange, much like a stock. Exchange traded funds can hold different assets, such as individual stocks, bonds, or commodities, or serve as a proxy for a stock market index.

An Swiss Market Index ETF is one way of investing in the Swiss Market Index. It’s simply an investment fund that mirrors the performance of the Swiss Market Index. When you buy shares in the fund, the value of your investment will rise or fall with the Swiss Market Index itself. 

ETFs are ideal for new investors because they have a very low minimum investment. You can start with a few pounds and get exposure to some of the world’s largest companies. They’re also practical if you plan on trading the Swiss Market index, because you can buy or sell shares in the fund throughout the day.

Examples of popular SMI ETFs

  • iShare SMI ETF (CH)
  • Amundi MSCI Switzerland UCITS ETF

Swiss Market index funds

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An index or mutual fund is an investment fund that aims to track the performance of a stock market index, such as the Swiss Market. It’s very similar to an ETF, in that there are low management fees and you can buy shares through your online broker.

However, there are a couple of differences. Swiss Market index funds are only priced at the end of each trading day, so you can buy or sell shares in the fund once per day. There may also be a higher barrier to entry, through a much larger minimum investment when you invest in Swiss Market index funds.

That means an Swiss Market Index mutual fund is better suited for long term investors with a higher initial budget, where the infrequent trading and barriers to entry are far less of an issue.

Swiss Market Index CFDs

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CFDs (contracts for difference) are a way to speculate on Swiss Market price changes with more flexibility than if you use an ETF or index fund. A CFD is a ‘derivative’, which means it gets its value from the underlying asset – in this case the Swiss Market – but it’s separate from it.

As a result, CFDs can be leveraged, where you borrow money to multiply the size of the trade, or they can be used to go ‘short’, where you place a trade on the index to fall in value. You can also buy and sell them outside of regular trading hours.

All of this means Swiss Market CFDs offer the potential to outperform a fund that passively tracks the Swiss Market’s performance. Of course, you can also underperform it as well. Tools like leverage and shorting introduce a lot more risk, and are best left to experienced traders.

Swiss Market futures

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Futures contracts are agreements to buy or sell the SMI at an agreed price on a set date in the future. Swiss Market futures are a means to predict how you think the index is going to perform over a set time frame, such as the next three or six months.

Most futures contracts involve leverage, so you only put up a small part of the total trade value (the margin) when you buy one. That makes futures more risky, and they require a bit more financial expertise to understand as well.

Some traders use futures as a hedge against the performance of stocks they own. For instance, if you own stocks that are part of the Swiss Market then you might want to short the Swiss Market so that you still make some money if the price falls.

Swiss Market stocks

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Another way to invest in the Swiss Market is to buy shares in the individual stocks that the index tracks. It isn’t practical to buy every share in the index, but you can invest directly into a few of the most heavily weighted stocks in the Swiss Market in order to get broad exposure to its performance.

The most heavily weighted stocks in the Swiss Market tend to be the largest companies by market capitalisation. If you invest directly in those largest stocks, you gain exposure to the index without taking on the risk of all the underlying companies.

One reason to do this is that these larger companies with the highest market cap dominate the index anyway, so that it can give you the impression of a diversified portfolio while actually being reliant on the performance of those particular stocks.

For the Swiss Market index, the largest stocks you might choose to invest in are:

CompanyIndex weight
Nestlé (NESN) 19.68%
Roche Holding (ROG) 19.08%
Novartis (NOVN) 14.63%
Zurich Insurance Group (ZURN) 7.85%
UBS Group (UBSG) 4.94%
Credit Suisse Group (CSGN) 3.97%
Swisscom (SCMN) 3.86%
ABB Ltd (ABBN) 3.86%
Lonza Group (LONN) 2.96%
Sika AG (SIKA) 2.76%

The flip side of investing directly like this is that you lose the diversification and stability that comes with buying into an entire index. It requires much more hands-on management to do your own stock picking, so it’s best suited to more experienced investors.

How much does it cost to invest in the Swiss Market index?

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From $0 to $5, depending on how you invest. For each option, you must consider the cost of buying the actual asset, whether that’s an ETF, index fund, CFD, or share, plus the fees associated with it.

InstrumentTrading feeManagement fee
Exchange traded funds$0-$5.990-0.2%
Index fund / mutual fund$0-$5.990.1-2%
Individual stock$0-$3None
CFD$0None

*A fee comparison of 3 leading brokers for example purposes

ETFs and CFDs are generally the cheapest option overall, as they have low fees and a low minimum investment. Index funds and mutual funds have low fees but may have a high minimum investment. Buying individual stocks is the most expensive option in absolute terms, because the share price of a single large company is often more than $100.

All options are likely to include a trading fee, which you pay each time you make a transaction. Some trading platforms offer zero-fee trading, with others it may be a few dollars. 

Then ETFs and index funds each have their own expense ratio. Expense ratios refer to an annual management fee, charged as a percentage of your total investment. Expense ratios are usually no more than 0.05%, so if you invest $1,000, you would pay $5 per year in management fees.

Should I invest in the Swiss Market index? 

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Yes, Swiss Market investing is a great choice if you’re looking for a safer investment with more price stability compared to picking individual stocks. It gives you an instantly diverse portfolio with exposure to a broad area of the stock market.

The flip side is that you have less control over which companies you invest in. An index committee decides how the index works, and you can’t pick and choose the underlying companies you like the most. The Swiss Market is better suited to hands-off investors, compared to those who have the skills, experience, and desire to pick their own stocks.

What are the advantages of investing in the Swiss Market index?

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An index provides instant stock market diversification, where you spread your risk across a large number of underlying companies, rather than one or two. Here are some more reasons why you might want to invest in the Swiss Market index:

  • Switzerland has a stable economy. The Swiss Market Index includes many of Switzerland’s leading companies known for their stability and reliability. Investing in the SMI provides exposure to a market well known for its safe haven status. 
  • It’s a diverse index. The SMI is comprised of stocks from various industries such as finance, healthcare, and industrials. This diversification helps spread risk while providing exposure to different areas of the Swiss economy. 
  • Switzerland’s economy is strong. Switzerland is known for its strong economy, and the country has many innovative companies and a highly skilled workforce. Investing in the SMI means you’ll be able to benefit from future economic growth. 
  • Many of the companies in the index provide international exposure. While the SMI is focused on Swiss companies, many of them have significant international exposure meaning you’ll benefit from the wider global economy. 
  • There is potential for dividends. A lot of companies that comprise the index have a reputation for paying regular dividends. This means that if you invest in funds or ETFs that track the index, you’ll receive a share of these payments. 

What are the disadvantages of investing in the Swiss Market index?

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The main risk of investing in the Swiss Market is that all the underlying companies are related in some way, so a broader economic downturn that affected the entire country would likely affect many stocks in the index at the same time. Here are some more risks of Swiss Market investing.

  • A few sectors can influence its performance. The performance of a few large companies influences the SMI. These companies predominantly belong to the healthcare and financial sectors, meaning there is some concentration risk. 
  • It’s a small index. The Swiss Market Index is made up of only 20 companies, which is significantly smaller compared to other global indexes. A concentrated portfolio of stocks means you’ll be open to specific company risks. 
  • Currency fluctuations may impact returns. Switzerland has its own currency, the Swiss Franc, which has been known to be volatile. Fluctuations in exchange rates between the CHF and an investor’s home currency can impact returns on investment. 
  • Switzerland is heavily reliant on exports. The global economy can impact the performance of the index. Switzerland relies heavily on exports, meaning economic downturns or global uncertainty can adversely affect the index’s performance. 
  • It is focused on large-cap stocks. The SMI primarily includes large-cap stocks, which may not fully represent the broader Swiss market. If you want to gain exposure to smaller companies, looking elsewhere is recommended. 
Invest in the the Swiss Market Index

FAQs

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Prash Raval
Financial Writer
Prash is a financial writer for Invezz covering FX, the stock market and investing. For over a decade he has traded spot FX full time while... read more.