S&P 500 fund represents the most widely cited
equity benchmark in the United States Of America. Around 70% of the
market cap belonging to different
stocks consists of the S&P 500 fund.
The S&P 500 fund came into being in 1923. Only 233 stocks were under S&P 500 fund in 1923. In 1957, the S&P 500 fund underwent modification to comprise of as many as 500 stocks which were common.
Constitutional makeup of S&P 500 fund:
Different companies belonging to the different economic sectors comprise of the S&P 500 fund.
The S&P 500 fund initially started functioning with 23 known sectors. As on date the S&P 500 fund consists of as many as 100 different companies of various economic segments.
The S&P 500 fund index burdened by market cap a considerable impact is laid down on the S&P 500 fund value by the leading companies.
Given below is a list of the ten top companies stake in S&P 500 fund.
- General Electric
- ExxonMobil
- Microsoft
- Wal-Mart Stores
- Pfizer
- Citigroup
- Intel
- American International Group
- Johnson & Johnson
- Bank of America
The undermentioned list provides a glimpse into the top ten segments of S&P 500 fund.
Financial services comprises 20.3% of the S&P 500 fund.
Healthcare comprises of 13.4% of the S&P 500 fund.
12.2% constitutes the Industrial Materials in the S&P 500 fund.
Consumer goods comprises of 9.7% in the S&P 500 fund.
Consumer services comprises of 8.8% the S&P 500 fund.
Hardware comprises of 10.8% in the S&P 500 fund.
Software comprises of 4.5% the S&P 500 fund.
Energy comprises of 6.5% the S&P 500 fund.
Media comprises of 3.9% the S&P 500 fund.
Business Services comprises of 3.9% the S&P 500 fund.
Advantages of S&P 500 fund:
The S&P 500 fund serves as one of the best methods by which the performance record of the business stalwarts can be determined.
The modus operandi of the S&P 500 fund is known to almost all the investors. Moreover, the S&P 500 fund is highly limpid.
Disadvantages of S&P 500 fund:
- The S&P 500 fund does not provide enough exposure to the small companies on the , market even though the small companies may be growing quite fast.
- The S&P 500 fund heavy-laden with market value, the leading companies have disproportional impact on the S&P 500 fund consequences.
Tracking instrument of S&P 500 fund:
Exchange traded fund referred to as “spyders” or “spiders” can be used to keep a track of the performance of the S&P 500 fund.
The tracking instrument can be had by an expense ratio which is as low as 0.12%.