Ryan Sterling
speaker
807 appearances
4 recordings
1 series
first heard Feb 2026
last heard 7 Sep
Ryan Sterling’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 4 in all, peaking in Sep 2026 with 1.
Appearances
So to the point that you just made, the largest companies get a larger weighting in the index than smaller companies.
Historically speaking, when you look at the top 10 companies in the S&P 500, they've represented about 18% to 20% of the total index.
So going back through history, you know, the top 10 have accounted for a large portion of the index.
But when you think about 20% of the top 10 companies and then 80% being the rest, it really isn't that much cause for concern.
Okay.
So today what's happened is the top 10 companies have grown in size to be now representing about 40% of the index.
Which now you're starting to see headlines that, hey, is the S&P 500 over-concentrated?
Do you really have the diversification?
Everything you just alluded to.
So that is true.
There's a but though.
The but is the reason these companies have grown to the size that they are today is because they're really top performing companies.
They have strong balance sheet.
They have durable moats and competitive advantages.
They have tremendous free cash flows and they've been really good allocators of capital over time.
So, you know, if you look at the companies like, you know, Google or Apple or Amazon, they're big investors.
because they deserve to be big, because they have grown so much over the years.
So when I think about the S&P 500 and I think about that market capitalization weight kind of being the driver of size of companies in the portfolio, I have to at times see that as a feature, not a bug, in the sense that the companies that are performing the best over time will command a higher weight than the companies that aren't doing as well over time.
Not this top heavy, but there have been times where the top 10 companies have represented more than 30%.
Going back to the late 90s, early 2000s, it topped up at around 29%.
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