Market Structure
What is S&P 500 Index?
The S&P 500 tracks 500 of the largest US-listed companies across 11 sectors, the world's most widely-followed equity benchmark and the default proxy for 'the US stock market'.
Formula
Float-adjusted market-capitalization-weighted index. Maintained by S&P Dow Jones Indices. Inception: 1957 (predecessor index back to 1923).
How to Interpret
The S&P 500 is the benchmark for the vast majority of US large-cap mutual funds and ETFs (SPY, VOO, IVV). Roughly 80% of professional active managers underperform it over 10+ year periods. Sector weights are dominated by Technology (~30%) and Communication Services (~9%). India's parallel benchmark is the Nifty 50.
Typical Ranges
Long-term real return (after inflation): ~7%. Nominal: ~10% historically (1928–2024). Use as the default benchmark for any US equity portfolio.