Top 500 Stocks, Give or Take $2.1 Trillion

March 29, 2024

Investors who assume the “500” in an S&P 500 index fund means the 500 largest US stocks are in for a surprise. As of February 29, 73 companies ranking in the top 500 on market capitalization were excluded from the S&P 500. These stocks represent $2.1 trillion USD in combined market value, which is 25% more than Australia’s entire stock market.1 Crikey!

Companies may be excluded from the S&P 500 due to index construction criteria. S&P has a litany of eligibility requirements. For example, companies are required to have positive earnings over the past four quarters for inclusion. That’s an important point about index fund investing. Indices are representations of the market, not the market itself. The construction of indices reflects a series of decisions that may not always prioritize risk and return for investors. And, as the S&P example demonstrates, index rules may cloud investors' understanding of what’s in their portfolio.

Market values in USD. Source: Dimensional using data from Russell, S&P, and MSCI. Companies not in the S&P 500 Index are those in the top 500 stocks by market capitalization in the Russell 3000 Index as of February 29, 2024, but missing from the S&P 500 Index. The Russell 3000 is a market cap weighted index. Indices are not available for direct investment. This information is intended for educational purposes and should not be considered a recommendation to buy or sell a particular security. Frank Russell Company is the source and owner of the trademarks, service marks, and copyrights related to the Russell Indexes. All rights reserved. © 2024 S&P Dow Jones Indices LLC, a division of S&P Global. MSCI data © MSCI 2024, all rights reserved.

1. Australian stocks in the MSCI All Country World IMI. MSCI data © MSCI 2024, all rights reserved.


All expressions of opinion are subject to change. This information is not meant to constitute investment advice, a recommendation of any securities product or investment strategy (including account type), or an offer of any services or products for sale, nor is it intended to provide a sufficient basis on which to make an investment decision. Investors should consult with a financial professional regarding their individual circumstances before making investment decisions. Diversification neither assures a profit nor guarantees against loss in a declining market.

Dimensional Fund Advisors LP is an investment advisor registered with the Securities and Exchange Commission.

Investment products: • Not FDIC Insured • Not Bank Guaranteed • May Lose Value

Dimensional Fund Advisors does not have any bank affiliates.