PSI: Complete Guide 2026

If you want exposure to the Portuguese equity market, PSI is the reference index to understand first.

What Is PSI?

PSI (formerly PSI 20) is the main Portuguese equity index on Euronext Lisbon.

It tracks major listed companies and acts as a local market barometer.

How the Index Is Weighted

PSI is capitalization-weighted.

Larger companies have more impact on index movement than smaller ones.

What Investors Should Watch

• sector concentration
• liquidity profile
• macro sensitivity (rates, growth, energy dynamics)
• correlation with global markets

Ways to Invest

1. Buy individual PSI constituents
2. Use PSI-linked ETF exposure
3. Combine local exposure with global ETF core

For global context: ETF Guide.

PSI in Portfolio Construction

A practical perspective:

• global diversified core for long-term growth
• modest local tilt for market familiarity and tactical preference

Avoid turning local concentration into your main risk.

Common Errors

• assuming local index is automatically diversified
• overestimating local growth visibility
• ignoring valuation and cycle risk

Conclusion

PSI can be a useful component, but usually as part of a broader diversified strategy.

Understand the structure first, then size exposure with discipline.