The Anatomy of an Index

The Anatomy of an Index

Did you know that more than $7 trillion in assets are benchmarked to the Standard & Poor’s 500 Composite Index, including $1.9 trillion in index assets?¹

The S&P 500 is ubiquitous—we see it on the TV news, read about it in the newspapers and very likely see some of our own investments’ performance compared against it. For an index that represents approximately 80% of the value of the U.S. equity market, it may be worthwhile to gain a better understanding of how it works.²

Cap & Criteria

The index, as we know it today, was introduced in 1957 and is maintained by Standard & Poor’s Index Committee. Contrary to popular belief, it is not comprised of the 500 largest companies in America, but is a collection of large-cap stocks representing a broad range of market sectors, including, among others, technology, energy, health care and consumer staples.³

Read More