Is the S&P 500 Too Top Heavy?

Is the S&P 500 Too Top Heavy?

The seven largest stocks in the S&P 500 accounted for 27% of its weighting.

Senior ETF Analyst
Reviewed by: Staff
Edited by: James Rubin

A monster earnings beat sent shares of Meta Platforms up by more than 20% midday on Friday, a gain of $200 billion in market cap—the largest ever single day increase in market value for any stock.  

Fellow tech stalwarts Nvidia and Amazon also soared, by 8% and 5%, respectively, sending the Invesco QQQ Trust (QQQ) up by 1.5% to a record high and the SPDR S&P 500 ETF Trust (SPY) up by 1%, also to a record. 

But the tech surge didn’t extend to other parts of the market. While QQQ and SPY were climbing, the Invesco S&P 500 Equal Weight ETF (RSP) was falling by 0.3%, leading to a performance gap of around 130 basis points between the equal weighted and market cap weighted S&P 500 funds.  

That’s the largest daily performance differential between the ETFs since June 2022 and the second largest since November 2020. 

33% Weighting

The divergence added fuel to the debate over whether the traditional S&P 500 was becoming too top heavy, with a handful of stocks dominating the index. On Friday, the six largest stocks in the S&P 500 had a 27% weighting in the index, while the 10 biggest accounted for a third of the index. 

That’s the largest weighting for the top ten since the early 1970s, according to the Financial Times and S&P Dow Jones Indices. 

Of course, that’s been a complaint that many investors have had for several years now, starting in 2020, when the top 10 first crossed the 30% threshold. 

Anyone who either sold their stocks or pivoted away from megacap tech by buying something like RSP has missed out on the continued growth of those giants. 

Since the start of this year, SPY is up 4%, while RSP is flat. Over the past year, SPY is up 20% versus 4% for RSP, and over the past five years, SPY is up 97% versus 71% for RSP. 

None of this is to say that SPY is going to outperform RSP indefinitely, but it’s a lesson that greater levels of concentration in the S&P 500 doesn’t necessarily suggest anything about the future performance of the index.  

Sumit Roy is the senior ETF analyst for, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for, with a particular focus on stock and bond exchange-traded funds.

He is the host of’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays,’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.