The S&P 500 comprises 500 companies that have issued 503 stocks, with some companies, like Alphabet, issuing multiple classes of shares. The top 10 largest holdings are listed on the official S&P Global website. A company must meet specific criteria to be included in the S&P 500.
While S&P does not provide the complete list of holdings for free, subscribers to S&P’s research unit, Capital IQ, can access the entire list. The S&P 500 companies represent the leading firms within their industries and are a barometer of U.S. economic activity.
S&P 500 Inclusion Criteria
Established in 1957, the S&P 500 is one of the most widely quoted stock market indexes, representing the largest publicly traded companies in the U.S. and focusing on the large-cap sector. To be added to the index, a company must meet several criteria:
- A total market capitalization of at least $14.5 billion
- Must be a U.S. company
- A float-adjusted liquidity ratio (FALR) of 0.75 or higher
- Positive earnings over the most recent four consecutive quarters
- Positive earnings for the most recent quarter
- Must meet certain liquidity requirements
Companies may be removed from the S&P 500 if they no longer meet these standards.
S&P 500 Calculation
The S&P 500 is a free-float market capitalization-weighted index. Market capitalization is calculated by multiplying the total number of outstanding shares by the current stock price. For example, a company with 20 million shares outstanding and a stock price of $100 per share would have a market cap of $2 billion.
The more valuable a company’s stock, the more it contributes to the S&P 500’s overall return. Typically, three-quarters of the index’s return is linked to just 50 to 75 stocks. Therefore, the addition or removal of smaller companies has little impact, while changes involving the largest stocks can significantly affect the index.
Sector Weighting
Understanding the S&P 500’s sector weighting is crucial. Sectors with smaller weightings may not significantly impact the index’s value, even if they outperform or underperform the market. For instance, the energy sector, representing only 4.4% of the S&P 500, may not drive the index higher even if oil prices rise, especially if the heavily weighted information technology sector underperforms.
Top 25 Components by Market Cap
The exact weightings of the top 25 components are not directly available from S&P but can be inferred from the SPDR S&P 500 Trust ETF (SPY), which tracks the S&P 500. As of September 21, 2023, the largest constituents by weight are:
- Apple (AAPL): 7.05%
- Microsoft (MSFT): 6.54%
- Amazon (AMZN): 3.24%
- NVIDIA (NVDA): 2.79%
- Alphabet Class A (GOOGL): 2.13%
- Tesla (TSLA): 1.95%
- Alphabet Class C (GOOG): 1.83%
- Berkshire Hathaway (BRK.B): 1.83%
- Meta (META): 1.81%
- UnitedHealth Group (UNH): 1.28%
- Exxon Mobil (XOM): 1.27%
- Eli Lilly (LLY): 1.21%
- JPMorgan Chase (JPM): 1.18%
- Johnson & Johnson (JNJ): 1.07%
- Visa Class A (V): 1.05%
- Procter & Gamble (PG): 0.99%
- Mastercard Class A (MA): 0.93%
- Broadcom (AVGO): 0.92%
- Home Depot (HD): 0.85%
- Chevron Corporation (CVX): 0.81%
- Merck (MRK): 0.75%
- AbbVie (ABBV): 0.75%
- Costco (COST): 0.67%
- PepsiCo (PEP): 0.67%
- Adobe (ADBE): 0.65%
How Many Companies Are in the S&P 500?
Although the index generally includes 500 companies, it currently comprises 503 stocks due to some companies issuing multiple classes of shares, such as Alphabet.
How to Buy the S&P 500?
As an index, the S&P 500 cannot be purchased directly. However, exchange-traded funds (ETFs) that track the index, such as the SPDR S&P 500 Trust ETF (SPY), can be bought.
S&P 500 index can be bought through these companies: eToro, Freedom24, Just2Trade, ForTrade