US 500 (S&P 500) Explained: Composition, Weighting, and Historical Performance
US 500
The US 500 (also known as SPX500, US SPX 500 or SP500) – more commonly known as the S&P 500, or the Standard and Poor’s 500 – tracks the performance of the 500 largest companies listed on the NYSE, Nasdaq and BZX exchanges. In short, the index tracks the performance of the biggest US companies. The index is, perhaps, the most important and most followed in the world, given that it includes around 80% of the total market cap of publicly listed US companies.
Weighting and Composition
The index is a market capitalisation weighted index, meaning that the larger a company’s market cap, the greater the weight that it has in the index. As of the start of 2024, the 10 largest stocks in the index comprise around a third of the index’s total weight.
Components of the US 500 are not selected by any strict rules-based system, and instead are decided by a committee at S&P Dow Jones Indices. Typically, however, new additions to the index are considered based on their market cap, trading volume, the exchange upon which they are listed, and the country in which the stock in question has its primary listing. The index is typically rebalanced on a quarterly basis, after market close on the third Friday in March, June, September, and December each year.
Historical Performance
Historically, the US 500 has tended to perform well on an annual basis, as the below shows. Of course, past performance is no guarantee of future results.
Gaining Exposure to the S&P 500
The S&P 500 is a stock market index, not a directly investable asset. However, you can still participate in its performance through various investment options. These include:
- Mutual funds and ETFs: These track the S&P 500, offering a diversified way to invest in the U.S. stock market.
- CFDs (contracts for difference): These are financial instruments used for trading, allowing speculation on the price movements of the S&P 500.
Important Note: CFDs are complex instruments and carry a high risk of losing money quickly due to leverage. Make sure you understand how CFDs work and can afford to take the high risk involved before trading them.
By weighting, the biggest 50 stocks in the index are as follows:
| Position | Stock | Ticker | Weighting as of 01/07/2024 |
| 1 | Microsoft Corp | MSFT | 7.31% |
| 2 | Apple Inc. | AAPL | 6.70% |
| 3 | Nvidia Corp | NVDA | 6.63% |
| 4 | Amazon.com Inc | AMZN | 3.94% |
| 5 | Meta Platforms, Inc. Class A | META | 2.47% |
| 6 | Alphabet Inc. Class A | GOOGL | 2.37% |
| 7 | Alphabet Inc. Class C | GOOG | 1.98% |
| 8 | Berkshire Hathaway Class B | BRK.B | 1.60% |
| 9 | Eli Lilly & Co. | LLY | 1.57% |
| 10 | Broadcom Inc. | AVGO | 1.50% |
| 11 | Jpmorgan Chase & Co. | JPM | 1.24% |
| 12 | Tesla, Inc. | TSLA | 1.19% |
| 13 | Exxon Mobil Corporation | XOM | 1.12% |
| 14 | Unitedhealth Group Incorporated | UNH | 0.97% |
| 15 | Visa Inc. | V | 0.91% |
| 16 | Procter & Gamble Company | PG | 0.85% |
| 17 | Costco Wholesale Corp | COST | 0.82% |
| 18 | Mastercard Incorporated | MA | 0.79% |
| 19 | Johnson & Johnson | JNJ | 0.76% |
| 20 | Home Depot, Inc. | HD | 0.74% |
| 21 | Merck & Co., Inc. | MRK | 0.71% |
| 22 | Abbvie Inc. | ABBV | 0.65% |
| 23 | Netflix Inc | NFLX | 0.64% |
| 24 | Walmart Inc. | WMT | 0.63% |
| 25 | Chevron Corporation | CVX | 0.58% |
| 26 | Bank of America Corporation | BAC | 0.58% |
| 27 | Advanced Micro Devices | AMD | 0.56% |
| 28 | Coca-Cola Company | KO | 0.54% |
| 29 | Salesforce, Inc. | CRM | 0.53% |
| 30 | Adobe Inc. | ADBE | 0.53% |
| 31 | Pepsico, Inc. | PEP | 0.50% |
| 32 | Oracle Corp | ORCL | 0.49% |
| 33 | Qualcomm Inc | QCOM | 0.47% |
| 34 | Thermo Fisher Scientific, Inc. | TMO | 0.46% |
| 35 | Linde Plc | LIN | 0.46% |
| 36 | Wells Fargo & Co. | WFC | 0.43% |
| 37 | Cisco Systems, Inc. | CSCO | 0.42% |
| 38 | Applied Materials Inc | AMAT | 0.42% |
| 39 | Accenture Plc | ACN | 0.41% |
| 40 | Mcdonald's Corporation | MCD | 0.40% |
| 41 | The Walt Disney Company | DIS | 0.40% |
| 42 | Intuit Inc | INTU | 0.40% |
| 43 | Abbott Laboratories | ABT | 0.39% |
| 44 | General Electric Company | GE | 0.38% |
| 45 | Verizon Communications | VZ | 0.37% |
| 46 | Danaher Corporation | DHR | 0.36% |
| 47 | Caterpillar Inc. | CAT | 0.35% |
| 48 | International Business Machines Corporation | IBM | 0.34% |
| 49 | Comcast Corp | CMCSA | 0.33% |
| 50 | Intel Corp | INTC | 0.28% |
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