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Top 25 Stocks in the S&P 500 By Index Weight for December 2023 – Investopedia

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The top 25 stocks in the S&P 500 by weighting represent the largest, most influential companies in the index and are indicative of the performance of the overall stock market and the health of the U.S. economy. The index weights constituents by market capitalization, meaning companies with larger market values carry greater importance than smaller-sized firms.

Key Takeaways

  • The S&P 500 is a major stock market index in the U.S. comprising 500 large- and mega-cap publicly traded companies.
  • The index’s broad exposure makes it a good gauge of the overall health and performance of the U.S. economy.
  • S&P 500 constituent stocks are primarily selected by market cap size, financial performance, and liquidity.
  • Information technology leads the S&P 500’s top sector weighting, while real estate has the lowest weighting.
  • Investors can use ETFs, mutual funds, and derivatives to gain exposure to the S&P 500 index.

Tech giants with trillion-dollar-plus market caps, such as Apple Inc. (AAPL), Microsoft Corporation (MSFT), and Amazon.com, Inc. (AMZN), have much higher index weights than apparel manufacturers Ralph Lauren Corporation (RL) and V.F. Corporation (VFC), which have market values of $8 billion and $6.49 billion, respectively. Investors monitor these stocks closely, as significant changes in their values could indicate shifts in the market.


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How are Stocks Selected for the S&P 500?

To be included in the S&P 500, a company must meet these criteria:

  • It’s a U.S.-based company and trades on a major U.S. exchange.
  • It has a market cap of $14.5 billion or more and a float-adjusted market cap of at least 50% of the unadjusted minimum market cap threshold.
  • It has reported positive earnings over the most recent quarter along with the past four consecutive quarters.
  • It has a float-adjusted liquidity ratio of 0.75 or greater and trades a minimum of 250,000 shares in the previous six months before evaluation.

The S&P 500 reconstitutes each June. Companies removed from the index are not replaced until the next annual reconstitution.

The SPDR S&P 500 ETF Trust’s top 25 constituents carry a combined index weighting of 45.16% as of Nov. 21, 2023.

Top Sectors in the S&P 500

The table below lists the S&P 500’s top sectors by weighting as of Nov. 21, 2023. The information technology, healthcare, financials, and consumer discretionary sectors carry a cumulative weight of 64.6%. Conversely, the least weighted sectors include utilities, materials, and real estate, with a combined weight of just 7.3%.

Top Sectors in the S&P 500
 Sector  Weighting in the S&P 500 
 Information Technology  28.1%
 Health Care  13.1%
 Financials  12.8%
 Consumer Discretionary  10.6%
 Communication Services  8.7%
 Industrials  8.3%
 Consumer Staples  6.6%
 Energy  4.5%
 Utilities  2.5%
 Materials  2.4%
 Real Estate  2.4%

Top 25 Companies by Index Weight

Below are the top 25 companies by index weight. The S&P Global website doesn’t disclose constituent weights, but we can use the S&P 500’s proxy exchange-traded fund (ETF), the SPDR S&P 500 ETF Trust (SPY), to cite index weights. Although the ETF’s holdings differ slightly from the underlying benchmark, they closely replicate its weights.

Apart from several minor weighting adjustments among the S&P 500’s top 25 constituents, the only noticeable change from last month is beverage giant PepsiCo, Inc. (PEP), replacing big box retailer Walmart Inc. (WMT) at number 25.

As of Nov. 21, 2023, here are the largest SPY holdings by weight:

  1. Apple Inc. (AAPL): 7.35%
  2. Microsoft Corporation (MSFT): 7.24%
  3. Amazon.com, Inc. (AMZN): 3.48%
  4. Nvidia Corporation (NVDA): 3.21%
  5. Alphabet Inc. Class A (GOOGL): 2.12%
  6. Meta Platforms, Inc. (META): 1.96%
  7. Alphabet Inc. Class C (GOOG): 1.82%
  8. Berkshire Hathaway Inc. (BRK.B): 1.73%
  9. Tesla, Inc. (TSLA): 1.71%
  10. UnitedHealth Group Incorporated (UNH): 1.31%
  11. Eli Lilly and Company (LLY): 1.24%
  12. JPMorgan Chase & Co. (JPM): 1.70%
  13. Exxon Mobil Corporation (XOM): 1.12%
  14. Broadcom Inc. (AVGO): 1.06%
  15. Visa Inc. (V): 1.06%
  16. Johnson & Johnson (JNJ): 10.94%
  17. The Procter & Gamble Company (PG): 0.94%
  18. Mastercard Incorporated (MA): 0.88%
  19. The Home Depot, Inc. (HD): 0.82%
  20. Adobe Inc. (ADBE): 0.72%
  21. Merck & Co., Inc. (MRK): 0.68%
  22. Chevron Corporation (CVX): 0.68%
  23. Costco Wholesale Corporation (COST): 0.67%
  24. AbbVie Inc. (ABBV): 0.64%
  25. PepsiCo, Inc. (PEP): 0.61%

Why Are the S&P 500’s Top 25 Stocks Important?

Analyzing the top 25 stocks of the S&P 500 by index weight sheds light on the health of the stock market and broader economy. Since these companies make up a significant part of the index, they reflect the performance of key sectors, major companies, and the benchmark itself. For example, its top three weightings — Apple, Microsoft, and Amazon — represented over 3% of the S&P 500’s return in April this year. Any changes in the index’s top 25 weightings may indicate key shifts in market prospects, which could present investment opportunities or added risks.

How Do I invest in the S&P 500 Index?

Investors can access the S&P 500 through different investments. The most straightforward is investing in an ETF that tracks the index, such as the SPY or iShares Core S&P 500 ETF (IVV). Similarly, mutual funds like the Fidelity 500 Index Fund (FXAIX) provide alternatives. Investors familiar with derivatives can speculate on the index’s direction using futures contracts and options. Another option is to buy shares in the 500 constituent companies, which isn’t practical because of commission charges.

What are Key Advantages and Disadvantages of Investing in the S&P 500 Index?

Investing in the S&P 500 carries both pros and cons. On the plus side, it provides diversification, which reduces overexposure to underperforming individual stocks and sectors. Investing in the index is also cost-effective and straightforward because of the many ETFs and mutual funds that track its performance. However, investing in the index has its risks. It remains susceptible to market fluctuations and volatility, particularly over the short term. Investors can also miss out on gains from top-performing stocks and sectors without control over the index’s constituent selection.

The Bottom Line

The S&P 500 weights constituent companies by market cap, meaning larger firms carry significantly more weight than those with small market values. As a result, tech giants such as Apple, Microsoft, and Amazon greatly influence the index’s performance. Therefore, investors closely follow the S&P 500’s top 25 stocks by index weighting to gauge the health of the stock market and the broader U.S. economy.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more info.

As of the date this article was written, the author does not own any of the above securities.

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