S&P 500 Funds

EconomyWatch
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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%.

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