S&P 500 Hits $7T in Indexed And Benchmarked Assets, Still “Top Choice” For Investors
In the stock market, the S&P 500 isn’t just the most popular index — for many, it’s the only way to go. Earlier this year, assets tracked and benchmarked by America’s largest index fund surpassed $7T — leaving competitors like the CRSP US Total Market Index and the Bloomberg US Aggregate Bond Index in the dust. But why is the S&P 500 the go-to for passive investors?
- Since 2015, passive ownership of the index has doubled thanks to the rise of index funds popularized by Vanguard, iShares (BlackRock), and State Street (SPDR).
- Another component is its success — over the past 20 years, the S&P 500 has outperformed 97% of US equity funds, making it one of the best-performing investments in history (FT).
America’s greatest investors: Although it’s considered a passive fund, the S&P 500 is surprisingly active. Index committee members meet every quarter to remove underperformers and add high-quality replacements. To be considered, companies must have been profitable for four consecutive quarters, be US-based, and have a market capitalization of at least $15.8B — but with only 500 spots in the index, competition to get in and stay in is fierce.
