In 1988, the Swiss Market Index (SMI) was introduced. With it, stock market traders lost their lunch break and companies gained stability. The history of the SMI is also a story of success and failure.

For stock traders on the Zurich Stock Exchange, 1 July 1988 marked the beginning of a new era: from now on, they traded securities without a lunch break, and shouted bids and prices at each other all day long. The reason for this radical change was the requirements of the Swiss Market Index, or SMI for short, which had just been launched by the Zurich Stock Exchange. The SMI is a blue-chip index, it tracks the price performance of the largest and most traded Swiss companies. It’s called "blue-chip index" because the most valuable poker chips in the Monte Carlo casinos are colored blue.

Swiss blue-chips, or the most valuable Swiss companies, account for more than 80 percent of the total capital of the Swiss stock market. No wonder it is of interest to follow their development through an index and to profit from it. It is attractive for companies to be included in the SMI, because this generates investments through - watch out, financial jargon! - passively managed funds or derivatives.


Derivatives (forward transactions based on an index, among other things) had been an important reason for creating the SMI in the first place. Derivatives had just entered the Swiss market in the late 1980s. They required uninterrupted calculation of their underlying index; the elimination of the lunch break for Zurich stock traders made it possible. The Swiss banks offering these new types of financial products were calculating their own indices for years. However, in the rapidly growing complexity of the financial center, the SMI offered a decisive advantage: it was more objective because it was not owned by a single bank, but was calculated by the independent stock exchange.

Soon after its introduction in July 1988, the media began quoting the SMI, and investors looked to it to see how business was going on the stock market. As a result of the growing attention and use, the SMI rose to become the flagship of Zurich's financial center. Today, it is the best-known and leading index of the Swiss stock market. The curve of the SMI, also often affectionately called "smiley", reflects economic trends, human hopes and fears. It reacts to both national and global events, and sometimes sensitively.

"30 Years of the SMI: Stock Indices Explained

In the special exhibition "30 Years of the SMI: Stock Indices Explained", we took the 30th anniversary of the leading Swiss index as an opportunity to take a deeper look into the topic of indices. Calculated for the first time in 1988 with a base of 1,500 points, the SMI quickly rose to become Switzerland's most important share index. But what is a blue-chip index anyway? What are indices used for? And since when have they existed? From 1 June 2018 to autumn 2019, the exhibition focused on these and many other questions and explained the origin, history and significance of the SMI, Dow Jones, Nikkei & Co.


In the 1990s, mergers were popular; several large companies merged at once to form what are now universally known giants: Schweizerische Kreditanstalt took over the financially troubled Schweizerische Volksbank in 1993; in 1997, it swallowed Winterthur Insurance and formed today's Credit Suisse. In the so-called "Basel Wedding," the chemical companies Ciba-Geigy and Sandoz merged in 1996 to form the pharmaceutical giant Novartis, and the following year Union Bank of Switzerland and Swiss Bank Corporation joined forces to form UBS, one of the world's largest asset managers today. During these years, the SMI quickly climbed to ever new highs, providing confidence in the Swiss economy.

In the early 2000s, however, the tide turned. The bursting of the dotcom bubble and the terrorist attacks on the World Trade Center caused dramatic falls in share prices. Last but not least, the Swissair grounding on October 2, 2001, is deeply engraved in the consciousness of the Swiss people. It is probably the most spectacular bankruptcy in recent Swiss economic history; Swissair shares were quoted at just 1.25 francs. On October 4, 2001, the Swiss stock exchange announced that Swissair shares would be excluded from all indices of the SMI family in accordance with the index regulations. In 2007, the unpleasant end of the real estate boom in the USA caused the SMI to collapse from a fabulous 9546 to 4235 points within weeks; this is a drop of 55 percent. It was to take years for the global and national economy to recover from this.

Despite all the dramatic collapses, the blue chips of the Swiss economy have increased in value by more than six times over the past 30 years to date. In the long run, the SMI curve paints a picture of steadily growing prosperity, lets hope.