ACTV - Weekly Market Pulse: A Concentrated Bet

2024-06-17 15:25:00 ET

Summary

• The technology sector, as of this week, is now 33.6% of the S&P 500 index.
• The top 3 companies in the index account for 21% of the index, also a record.
• The index has 500 stocks, but if you own it, nearly half your money is invested in just 15 stocks.

The S&P 500 (SPX) reached a milestone recently. Or at least I think so. The technology sector, as of this week, is now 33.6% of the index. If you count the Communications sector as technology – and you should since 49% of the sector is Meta ([[META]], [[META:CA]]) and Google ([[GOOG]], [[GOOGL]]) – the allocation to technology-oriented companies is 42.8%. The top 3 companies in the index account for 21% of the index, also a record. 6 of the top 7 stocks are technology – the only exception being Amazon ([[AMZN]], [[AMZN]]) which could be considered tech as well – and represent 32.9% of the index. The top 10 now accounts for 36% of the index, the top 15 an astounding 42.25%. The index has 500 stocks, but if you own it, nearly half your money is invested in just 15 stocks. I suppose one can call that diversified, but it surely isn’t what most people think they are getting when they buy SPY....

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