Exchange operator SIX has expanded its Swiss equity index family by launching the SPI ESG 25 and the SMI Equal Weight, complementing existing products with alternative weighting concepts and an ESG blue-chip index.
The SPI ESG 25 index represents a focused subset of the broader SPI ESG Index – which contains more than 150 stocks – enabling financial products that require highly liquid instruments.
The new index’s 25 companies are selected based on the highest combined scores in terms of market capitalisation, on-order-book turnover and ESG Impact Ratings provided by Swiss sustainability rating company Inrate. Components are weighted by free‑float market capitalisation and tilted by a factor reflecting their Inrate ESG rating.
Companies must have an Inrate ESG Impact Rating of at least C+ and comply with UN Global Compact Principles and OECD Guidelines on responsible business conduct, as well as observing revenue thresholds from activities including adult entertainment, alcohol, armaments, gambling, genetic engineering, nuclear energy, coal, fossil fuels, and tobacco.
The largest four positions in the SPI ESG 25 are capped at 9%, all others at 4.5%. The index is reviewed annually in September and the weightings and ESG tilts are adjusted quarterly.
The SMI Equal Weight index offers equal levels of exposure to the 20 most liquid stocks on Switzerland’s leading equity benchmark. By mitigating concentration risk, the equal weighting approach achieves performance through diversification benefits, systematic risk exposure and the rebalancing effect.
SIX said the two new benchmarks respond to demand for a narrower ESG-focused portfolio, and for indices with alternative weighting concepts relevant to asset managers, exchange-traded fund providers and structured product issuers.
“The SPI ESG 25 simultaneously enforces size, tradability, and ESG quality criteria in its selection. Its weighting exploits an ESG rating tilting to boost better rated components, and applies capping rules to limit concentration, ensuring continued investibility. A buffer mechanism helps limit unnecessary turnover. Use-cases that require highly liquid stocks can be easier implemented with the SPI ESG 25 Index,” said Dr Christian Bahr, Head Index Services, SIX.
