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Investor Update

Thursday, June 11, 2026

Three Ways to Diversify From a Top-Heavy S&P 500

By Charles Rotblut, CFA

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Concentration in the S&P 500 index is back near its highest level in decades. As of the close on Tuesday, June 9, 2026, the index's 10 largest constituents by market capitalization comprised 41.5% of its total market cap.

Those companies, from largest to smallest, are: Nvidia Corp. (NVDA), Apple Inc. (AAPL), Alphabet Inc. (GOOGL), Alphabet Inc. (GOOG), Microsoft Corp. (MSFT), Amazon.com Inc. (AMZN), Broadcom Inc. (AVGO), Tesla Inc. (TSLA), Meta Platforms Inc. (META) and Micron Technology Inc. (MU). Eight of these 10 constituents are in the information technology or communication services sectors. Amazon and Tesla, which have aspects of a technology company, belong to the consumer discretionary sector. (S&P Dow Jones Indices lists the two Alphabet share classes as separate constituents.)

This high level of concentration continues to drive the S&P 500's performance. It also distorts how the index and its typical constituent are performing. This becomes obvious when we compare iShares Core S&P 500 ETF (IVV) to Invesco S&P 500 Equal Weight ETF (RSP). The two exchange-traded funds (ETFs) hold the same stocks but allocate their portfolios differently. The latter, as its name implies, rebalances quarterly to weight each of the S&P 500's stocks equally.

Over the past three months, iShares Core S&P 500 has outperformed Invesco S&P 500 Equal Weight by 2.2 percentage points (9.4% versus 7.2%).

Source: AAII.com and QuoteMedia. Data as of 6/11/2026. 

What Members Are Following on AAII.com

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