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Rekenthaler Report

The S&P 500 Grows Ever More Concentrated

Does this bode well for small-value stocks?

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Ahead of Their Time
Entering this year, observers had long complained that the S&P 500 was overly concentrated, thereby relying too heavily on the performance of its largest positions. Such was the lament in 2016, and in 2017, and again in early 2019.

However, as measured by the size of the index’s 10 largest positions, the charge didn’t stick. The graph below depicts the cumulative weighting of Vanguard 500 Index’s (VFINX) Top 10 holdings, using each year’s June portfolio, from 2005 through 2019. The recent results were unremarkable, landing only slightly above the 15-year norm, and matched by two previous showings. 

John Rekenthaler does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.