Q. Does S&P 500 index include the 500 largest US companies?
A. No. While many of the stocks in the Index are among the largest, there are also small relatively small companies, however, they are generally leaders within their industry groups.
S&P identifies the important industry groups within the U.S. economy and then allocates a representative sample of stocks within each group to the S&P 500. There are four major industry sectors within the Index: Industrial, Utilities, Financial, and Transportation.
Also, note that the S&P Index is a market value-weighted index (shares outstanding times stock price) in which each company's influence in Index performance is directly proportional to its market value.
A. No. While many of the stocks in the Index are among the largest, there are also small relatively small companies, however, they are generally leaders within their industry groups.
S&P identifies the important industry groups within the U.S. economy and then allocates a representative sample of stocks within each group to the S&P 500. There are four major industry sectors within the Index: Industrial, Utilities, Financial, and Transportation.
Also, note that the S&P Index is a market value-weighted index (shares outstanding times stock price) in which each company's influence in Index performance is directly proportional to its market value.
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