S&P 500

The S&P 500 is a stock market index that tracks 500 large-cap US companies, weighted by free-float market capitalisation. It is maintained by S&P Dow Jones Indices and is the most widely-followed gauge of US large-cap equity performance.

The S&P 500 holds 500 companies weighted by market capitalisation, while the Dow holds just 30 companies weighted by share price. Because the S&P 500 is broader and uses cap-weighting, it is the institutional preferred benchmark for US equity exposure.

You cannot buy the index itself, but you can hold ETFs that track it exactly — SPY (SPDR), VOO (Vanguard) and IVV (iShares) are the three largest. Each provides essentially identical exposure with annual expense ratios of 0.03-0.09%.

The top weights are mega-cap technology companies — typically Apple, Microsoft, Nvidia, Amazon, Alphabet and Meta — which together account for roughly 30% of the index. This concentration means index returns are heavily influenced by these few names.