The S&P 500 Index explained
Table of Contents:
Introduction
The S&P 500 was founded in 1957. The S&P 500 is closely watched by market analysts and the media since its performance represents a gauge into the health or lack there of for the U.S. economy.
The S&P (Standards and Poor's) 500 includes 505 common stocks issued by the 500 large capitalization companies included in the index.
A committee from the S&P Dow Jones Indices, Inc. determines the companies to include in the S&P 500 Index.
According to Investopedia, to qualify for the
index a company must have:
- A market cap of at least $13.1 billion
- At least a quarter-million of its shares trade in each of the previous six months
- Most of its shares in the public’s hands
- Had it initial public offering at least one year earlier
- Have a positive sum of the previous four quarters of earnings, as well as the most recent quarter
According to Wikipedia, “the index includes about 80 percent
of the American equity market by capitalization.” The S&P 500 is a weighted index. Wikipedia says the S&P 500 “is weighted by
free-float market capitalization, so more valuable companies account for
relatively more weight in the index.”
The companies and their weights in the index are updated
regularly using the S&P Dow Jones Indices, Inc. criteria listed above. According to Wikipedia, the index currently “contains
505 stocks because it includes two share classes of stock from 5 of” the
component companies.
The S&P 500 index is a weighted index and measures the capital-weighted returns of the stocks in the S&P 500.
Check out the beginner's guide to stock investing to learn more about investing.
S&P 500 FAQs from Investopedia:
Who Keeps Track of the S&P 500 Constituents?
The S&P Dow Jones Indices, a subsidiary of S&P
Global, Inc., determines which companies get added to the index. It sets the
requirements and monitors the constituents' adherence to those requirements.
How Does a Company Get Added to the S&P 500?
To be eligible for S&P 500 index inclusion, a company should be a U.S. company, have a market capitalization of at least $13.1 billion, be highly liquid, and have a public float of at least 10% of its shares outstanding. The company must also be profitable in its most recent quarter’s earnings, and the sum of its trailing four consecutive quarters’ earnings must be positive.
Does the S&P 500 include Nasdaq Stocks?
Yes, the S&P 500 is composed of 500 of the largest
companies traded on the NYSE, Nasdaq, and Cboe.
What Are the 10 Biggest Stocks in the S&P 500?
The 10 largest components of the S&P 500, as of Nov. 30,
2021, include:
- Apple Inc. (AAPL)
- Microsoft Corp. (MSFT)
- Amazon.com, Inc. (AMZN)
- Tesla, Inc. (TSLA)
- Alphabet Inc. Class A (GOOGL)
- Nvidia Corp. (NVDA)
- Alphabet Inc. Class C (GOOG)
- Meta Platforms (FB), formerly Facebook
- Berkshire Hathaway Inc. (BRK.B)
- JPMorgan Chase & Co. (JPM)
Can You Just Invest in the S&P 500?
If you want to invest in the S&P 500 as a whole, you
don't need to purchase all 500 stocks individually. Several index funds and
exchange-traded funds (ETFs) are available to investors. These funds are
designed to track the performance of the S&P 500 index.
The annual returns of the S&P 500 since 2010 are:
Year |
Return [%] |
2021 |
30.92 |
2020 |
18.40 |
2019 |
31.49 |
2018 |
-4.38 |
2017 |
21.83 |
2016 |
11.96 |
2015 |
1.36 |
2014 |
13.52 |
2013 |
32.15 |
2012 |
15.89 |
2011 |
2.10 |
2010 |
14.82 |
The S&P 500 entire history min/max annual return: -43.8%/52.6%
Last 25 years mean annual return: 11.4%
Last 10 years mean annual return: 17.3%
Last 5 years mean annual return: 19.7%
Stocks included in the S&P 500 are (as of March 19, 2022):
# |
Company |
Symbol |
Weight |
1 |
6.69658 |
||
2 |
5.93045 |
||
3 |
3.66975 |
||
4 |
2.15442 |
||
5 |
2.01394 |
||
6 |
1.89700 |
||
7 |
1.69035 |
||
8 |
1.65660 |
||
9 |
1.31644 |
||
10 |
1.27829 |
||
11 |
1.24589 |
||
12 |
1.10864 |
||
13 |
0.97270 |
||
14 |
0.95816 |
||
15 |
0.95018 |
||
16 |
0.89504 |
||
17 |
0.82945 |
||
18 |
0.82772 |
||
19 |
0.81494 |
||
20 |
0.80410 |
||
21 |
0.75050 |
||
22 |
0.67840 |
||
23 |
0.66406 |
||
24 |
0.65378 |
||
25 |
0.63415 |
||
26 |
0.62530 |
||
27 |
0.60681 |
||
28 |
0.60359 |
||
29 |
0.59567 |
||
30 |
0.58028 |
||
31 |
0.57358 |
||
32 |
0.56717 |
||
33 |
0.56510 |
||
34 |
0.55191 |
||
35 |
0.55141 |
||
36 |
0.54938 |
||
37 |
0.53995 |
||
38 |
0.53342 |
||
39 |
0.51320 |
||
40 |
0.48867 |
||
41 |
0.47905 |
||
42 |
0.47497 |
||
43 |
0.45817 |
||
44 |
0.45353 |
||
45 |
0.44197 |
||
46 |
0.44121 |
||
47 |
0.44032 |
||
48 |
0.43485 |
||
49 |
0.4344 |
||
50 |
0.43431 |
||
51 |
0.43393 |
||
52 |
0.42445 |
||
53 |
0.41829 |
||
54 |
0.39533 |
||
55 |
0.39157 |
||
56 |
0.38828 |
||
57 |
0.38238 |
||
58 |
0.38198 |
||
59 |
0.36131 |
||
60 |
0.36065 |
||
61 |
0.35824 |
||
62 |
0.35555 |
||
63 |
0.35373 |
||
64 |
0.35275 |
||
65 |
0.34890 |
||
66 |
0.34794 |
||
67 |
0.32101 |
||
68 |
0.31900 |
||
69 |
0.31396 |
||
70 |
0.31190 |
||
71 |
0.31058 |
||
72 |
0.30913 |
||
73 |
0.3067 |
||
74 |
0.30644 |
||
75 |
0.30427 |
||
76 |
0.30187 |
||
77 |
0.29781 |
||
78 |
0.28822 |
||
79 |
0.28282 |
||
80 |
0.28146 |
||
81 |
0.28017 |
||
82 |
0.27996 |
||
83 |
0.27589 |
||
84 |
0.26933 |
||
85 |
0.25405 |
||
86 |
0.2453 |
||
87 |
0.24339 |
||
88 |
0.24185 |
||
89 |
0.24106 |
||
90 |
0.23715 |
||
91 |
0.23676 |
||
92 |
0.23635 |
||
93 |
0.23258 |
||
94 |
0.22995 |
||
95 |
0.22771 |
||
96 |
0.21893 |
||
97 |
0.21838 |
||
98 |
0.21768 |
||
99 |
0.21550 |
||
100 |
0.21501 |
||
101 |
0.20987 |
||
102 |
0.20433 |
||
103 |
0.20423 |
||
104 |
0.2021 |
||
105 |
0.20130 |
||
106 |
0.20103 |
||
107 |
0.20070 |
||
108 |
0.19834 |
||
109 |
0.19833 |
||
110 |
0.19354 |
||
111 |
0.19246 |
||
112 |
0.19125 |
||
113 |
0.19066 |
||
114 |
0.18744 |
||
115 |
0.18629 |
||
116 |
0.18388 |
||
117 |
0.17873 |
||
118 |
0.17862 |
||
119 |
0.17383 |
||
120 |
0.17265 |
||
121 |
0.17124 |
||
122 |
0.17111 |
||
123 |
0.17102 |
||
124 |
0.17011 |
||
125 |
0.16936 |
||
126 |
0.16933 |
||
127 |
0.16879 |
||
128 |
0.16820 |
||
129 |
0.16477 |
||
130 |
0.16393 |
||
131 |
0.16190 |
||
132 |
0.16029 |
||
133 |
0.15963 |
||
134 |
0.15932 |
||
135 |
0.15888 |
||
136 |
0.15668 |
||
137 |
0.15655 |
||
138 |
0.15517 |
||
139 |
0.15253 |
||
140 |
0.15140 |
||
141 |
0.14911 |
||
142 |
0.14893 |
||
143 |
0.14762 |
||
144 |
0.14631 |
||
145 |
0.14308 |
||
146 |
0.14218 |
||
147 |
0.14155 |
||
148 |
0.13926 |
||
149 |
0.13854 |
||
150 |
0.13750 |
||
151 |
0.13706 |
||
152 |
0.13542 |
||
153 |
0.13519 |
||
154 |
0.13445 |
||
155 |
0.13224 |
||
156 |
0.13067 |
||
157 |
0.13044 |
||
158 |
0.13014 |
||
159 |
0.12721 |
||
160 |
0.12711 |
||
161 |
0.12694 |
||
162 |
0.12645 |
||
163 |
0.12522 |
||
164 |
0.12518 |
||
165 |
0.12443 |
||
166 |
0.12438 |
||
167 |
0.12397 |
||
168 |
0.12347 |
||
169 |
0.12135 |
||
170 |
0.12050 |
||
171 |
0.11983 |
||
172 |
0.11916 |
||
173 |
0.11753 |
||
174 |
0.11716 |
||
175 |
0.11675 |
||
176 |
0.11627 |
||
177 |
0.11560 |
||
178 |
0.11428 |
||
179 |
0.11415 |
||
180 |
0.11352 |
||
181 |
0.11336 |
||
182 |
0.11255 |
||
183 |
0.11203 |
||
184 |
0.11094 |
||
185 |
0.10993 |
||
186 |
0.10978 |
||
187 |
0.10947 |
||
188 |
0.10924 |
||
189 |
0.10922 |
||
190 |
0.10919 |
||
191 |
0.10899 |
||
192 |
0.10748 |
||
193 |
0.10722 |
||
194 |
0.10677 |
||
195 |
0.10638 |
||
196 |
0.10609 |
||
197 |
0.10511 |
||
198 |
0.10442 |
||
199 |
0.10432 |
||
200 |
0.10361 |
||
201 |
0.10321 |
||
202 |
0.10245 |
||
203 |
0.10241 |
||
204 |
0.10236 |
||
205 |
0.10113 |
||
206 |
0.10076 |
||
207 |
0.10070 |
||
208 |
0.10045 |
||
209 |
0.10027 |
||
210 |
0.09992 |
||
211 |
0.09961 |
||
212 |
0.09749 |
||
213 |
0.09732 |
||
214 |
0.09708 |
||
215 |
0.09676 |
||
216 |
0.09663 |
||
217 |
0.0952 |
||
218 |
0.09339 |
||
219 |
0.09335 |
||
220 |
0.09324 |
||
221 |
0.09276 |
||
222 |
0.0923 |
||
223 |
0.09177 |
||
224 |
0.09153 |
||
225 |
0.09145 |
||
226 |
0.09112 |
||
227 |
0.09107 |
||
228 |
0.08980 |
||
229 |
0.08912 |
||
230 |
0.08843 |
||
231 |
0.08839 |
||
232 |
0.08801 |
||
233 |
0.08775 |
||
234 |
0.08724 |
||
235 |
0.08712 |
||
236 |
0.08623 |
||
237 |
0.08603 |
||
238 |
0.08577 |
||
239 |
0.08552 |
||
240 |
0.08535 |
||
241 |
0.08523 |
||
242 |
0.08402 |
||
243 |
0.08374 |
||
244 |
0.08363 |
||
245 |
0.08352 |
||
246 |
0.08201 |
||
247 |
0.08186 |
||
248 |
0.08168 |
||
249 |
0.08160 |
||
250 |
0.08132 |
||
251 |
0.08108 |
||
252 |
0.08088 |
||
253 |
0.08072 |
||
254 |
0.08069 |
||
255 |
0.08029 |
||
256 |
0.08006 |
||
257 |
0.07992 |
||
258 |
0.07962 |
||
259 |
0.07952 |
||
260 |
0.07914 |
||
261 |
0.07881 |
||
262 |
0.07791 |
||
263 |
0.07790 |
||
264 |
0.07766 |
||
265 |
0.07742 |
||
266 |
0.07737 |
||
267 |
0.07716 |
||
268 |
0.07635 |
||
269 |
0.07566 |
||
270 |
0.07504 |
||
271 |
0.07405 |
||
272 |
0.07385 |
||
273 |
0.07324 |
||
274 |
0.07287 |
||
275 |
0.07245 |
||
276 |
0.07218 |
||
277 |
0.07217 |
||
278 |
0.07205 |
||
279 |
0.07155 |
||
280 |
0.07145 |
||
281 |
0.07106 |
||
282 |
0.07024 |
||
283 |
0.0701 |
||
284 |
0.06980 |
||
285 |
0.06821 |
||
286 |
0.06763 |
||
287 |
0.06715 |
||
288 |
0.06701 |
||
289 |
0.06616 |
||
290 |
0.06555 |
||
291 |
0.06509 |
||
292 |
0.06505 |
||
293 |
0.06491 |
||
294 |
0.06454 |
||
295 |
0.06449 |
||
296 |
0.06449 |
||
297 |
0.06442 |
||
298 |
0.06407 |
||
299 |
0.06406 |
||
300 |
0.06403 |
||
301 |
0.06386 |
||
302 |
0.06380 |
||
303 |
0.06352 |
||
304 |
0.06331 |
||
305 |
0.06158 |
||
306 |
0.06136 |
||
307 |
0.06098 |
||
308 |
0.06088 |
||
309 |
0.06086 |
||
310 |
0.06058 |
||
311 |
0.06050 |
||
312 |
0.0604 |
||
313 |
0.06028 |
||
314 |
0.06011 |
||
315 |
0.05984 |
||
316 |
0.05968 |
||
317 |
0.05955 |
||
318 |
0.05935 |
||
319 |
0.05926 |
||
320 |
0.05882 |
||
321 |
0.05880 |
||
322 |
0.05867 |
||
323 |
0.05841 |
||
324 |
0.05836 |
||
325 |
0.05828 |
||
326 |
0.05667 |
||
327 |
0.05660 |
||
328 |
0.05605 |
||
329 |
0.05529 |
||
330 |
0.05501 |
||
331 |
0.05496 |
||
332 |
0.05485 |
||
333 |
0.05467 |
||
334 |
0.05439 |
||
335 |
0.05424 |
||
336 |
0.05408 |
||
337 |
0.05369 |
||
338 |
0.05311 |
||
339 |
0.05299 |
||
340 |
0.05297 |
||
341 |
0.05261 |
||
342 |
0.05224 |
||
343 |
0.05189 |
||
344 |
0.05188 |
||
345 |
0.05176 |
||
346 |
0.05157 |
||
347 |
0.05156 |
||
348 |
0.05146 |
||
349 |
0.05092 |
||
350 |
0.05023 |
||
351 |
0.05014 |
||
352 |
0.04946 |
||
353 |
0.04944 |
||
354 |
0.04900 |
||
355 |
0.04896 |
||
356 |
0.04861 |
||
357 |
0.04860 |
||
358 |
0.04856 |
||
359 |
0.04843 |
||
360 |
0.04807 |
||
361 |
0.04804 |
||
362 |
0.04803 |
||
363 |
0.04789 |
||
364 |
0.04783 |
||
365 |
0.04760 |
||
366 |
0.04737 |
||
367 |
0.04734 |
||
368 |
0.04723 |
||
369 |
0.04711 |
||
370 |
0.04697 |
||
371 |
0.04686 |
||
372 |
0.04679 |
||
373 |
0.04672 |
||
374 |
0.04636 |
||
375 |
0.04630 |
||
376 |
0.04543 |
||
377 |
0.04524 |
||
378 |
0.04487 |
||
379 |
0.04471 |
||
380 |
0.04462 |
||
381 |
0.04462 |
||
382 |
0.04442 |
||
383 |
0.04441 |
||
384 |
0.04430 |
||
385 |
0.04427 |
||
386 |
0.04418 |
||
387 |
0.04406 |
||
388 |
0.04359 |
||
389 |
0.04333 |
||
390 |
0.04324 |
||
391 |
0.04315 |
||
392 |
0.04313 |
||
393 |
0.04248 |
||
394 |
0.04241 |
||
395 |
0.04168 |
||
396 |
0.04154 |
||
397 |
0.04149 |
||
398 |
0.04142 |
||
399 |
0.04114 |
||
400 |
0.04085 |
||
401 |
0.04076 |
||
402 |
0.04036 |
||
403 |
0.04026 |
||
404 |
0.04019 |
||
405 |
0.03998 |
||
406 |
0.03998 |
||
407 |
0.03973 |
||
408 |
0.03965 |
||
409 |
0.03911 |
||
410 |
0.03905 |
||
411 |
0.03893 |
||
412 |
0.03866 |
||
413 |
0.03848 |
||
414 |
0.03838 |
||
415 |
0.03832 |
||
416 |
0.03831 |
||
417 |
0.03789 |
||
418 |
0.03780 |
||
419 |
0.03774 |
||
420 |
0.03757 |
||
421 |
0.03751 |
||
422 |
0.03739 |
||
423 |
0.0373 |
||
424 |
0.03662 |
||
425 |
0.03656 |
||
426 |
0.03604 |
||
427 |
0.03597 |
||
428 |
0.03577 |
||
429 |
0.03568 |
||
430 |
0.03567 |
||
431 |
0.03554 |
||
432 |
0.03538 |
||
433 |
0.03483 |
||
434 |
0.03482 |
||
435 |
0.03446 |
||
436 |
0.03437 |
||
437 |
0.03393 |
||
438 |
0.03390 |
||
439 |
0.03383 |
||
440 |
0.03351 |
||
441 |
0.03349 |
||
442 |
0.03304 |
||
443 |
0.03301 |
||
444 |
0.03296 |
||
445 |
0.03238 |
||
446 |
0.03218 |
||
447 |
0.03208 |
||
448 |
0.03180 |
||
449 |
0.03176 |
||
450 |
0.03148 |
||
451 |
0.03136 |
||
452 |
0.03133 |
||
453 |
0.03082 |
||
454 |
0.03037 |
||
455 |
0.03033 |
||
456 |
0.03010 |
||
457 |
0.02991 |
||
458 |
0.02927 |
||
459 |
0.02916 |
||
460 |
0.02859 |
||
461 |
0.02846 |
||
462 |
0.02823 |
||
463 |
0.02800 |
||
464 |
0.02754 |
||
465 |
0.02735 |
||
466 |
0.02684 |
||
467 |
0.02665 |
||
468 |
0.02654 |
||
469 |
0.02547 |
||
470 |
0.02523 |
||
471 |
0.02467 |
||
472 |
0.02466 |
||
473 |
0.02420 |
||
474 |
0.02415 |
||
475 |
0.02376 |
||
476 |
0.0236 |
||
477 |
0.02337 |
||
478 |
0.02334 |
||
479 |
0.02309 |
||
480 |
0.02303 |
||
481 |
0.02253 |
||
482 |
0.02202 |
||
483 |
0.02195 |
||
484 |
0.02178 |
||
485 |
0.02170 |
||
486 |
0.02115 |
||
487 |
0.02093 |
||
488 |
0.02073 |
||
489 |
0.02051 |
||
490 |
0.02041 |
||
491 |
0.02026 |
||
492 |
0.02009 |
||
493 |
0.01996 |
||
494 |
0.01943 |
||
495 |
0.01927 |
||
496 |
0.01917 |
||
497 |
0.01815 |
||
498 |
0.01568 |
||
499 |
0.01546 |
||
500 |
0.01468 |
||
501 |
0.01127 |
||
502 |
0.01120 |
||
503 |
0.00873 |
||
504 |
0.00813 |
||
505 |
0.00751 |
S&P 500 Index Final Thoughts
The S&P 500 Index is a good overall barometer for the larger United States (U.S.) economy. The index is sufficiently comprehensive to be a proxy for the overall U.S. economy.
Many view the S&P 500 as the key index for the US stock market, US economy, and its trends. It is chosen by market participants, policy makers, and institutions alike to be the measure of the relative strength or weakness of the U.S. economy. Warren Buffet monitors the S&P 500 index valuation to determine if the U.S. stock market is expensive or is trading at historical discounts.
The S&P 500 is broadly diversified across the U.S. equity market in that the index represents all sectors of the U.S. stock market. Investing money into a S&P 500 index exchange traded fund (etf) or mutual fund is considered relatively low market risk because of the broad diversification.
To learn more about investing check out the beginner's guide to stock investing.
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