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Created on 17.07.2019

Put it simply, please! Index

What is an index and what does it tell us? Joel Schmid, deputy Branch Manager at the PostFinance branch in Berne, explains it in 45 seconds.

Sounds simple, doesn’t it? You can read the detailed explanation again here:

You can imagine an index as a kind of barometer that illustrates the performance of securities from different companies. The best-known Swiss index, the SMI, represents the shares in Switzerland’s largest 20 companies. However, as well as shares, there are also indexes for a wide range of different investments – raw materials, bonds and real estate, for instance. An index replicates part of a market and shows how it is performing. Indices are very suitable as a means of comparison, for example if you want to compare stock market trends in individual countries.

A distinction is generally made between two different types of index – price and performance indexes. These either show the prices of various shares alone (price index) or also take into account the related dividend payments (performance index).

You can read more about share indexes in our article “What is a share index?” If you’d like to find out more about the SMI, our article “How is the SMI made up?” contains further fascinating information.

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