Propping Up The Entire Market: Apple And Microsoft Hit Record High Weighting In S&P 500 Index

Two of the largest technology companies in the world are the top two holdings of the largest ETF and have seen their weighting in the fund hit new record levels.

Here’s what investors should know.

What Happened: Launched in January 1993, the SPDR S&P 500 ETF Trust SPY, was the first exchange-traded fund offered to investors.

The ETF tracks the S&P 500, a leading market index holding 500 of the top U.S. publicly traded companies.

Among the holdings in the index and ETF are Microsoft Corp MSFT and Apple Inc AAPL.

As shared on Twitter by user Rahul (@rhemranjani9), a chart showed the two stocks now make up a record percentage of the index and ETF. The chart also illustrated that the two stocks made up around 6% of the assets in the holdings from 2015 to 2019 and then from 2020 to 2024 saw the weighting grow from 8% to nearly 14% today.

Holdings of the S&P 500 are weighted based on the market capitalization and number of publicly traded shares.

A look at the ETF’s holdings page showed Apple and Microsoft held weightings of 7.24% and 6.56%, respectively, as of April 28.

Here’s a look at the top 10 holdings of the ETF:

Apple: 7.24%

Microsoft: 6.56%

Amazon.com, Inc. AMZN: 2.7%

NVIDIA Corporation NVDA: 1.96%

Alphabet Inc Class A GOOGL: 1.83%

Berkshire Hathaway Inc (NYSE: BRK-A)(NYSE: BRK-B): 1.70%

Alphabet Inc Class C GOOG: 1.61%

Meta Platforms Inc META: 1.53%

Exxon Mobil Corp XOM: 1.40%

UnitedHealth Group Inc UNH: 1.32%

Apple and Microsoft make up 13.8% of the ETF combined. The third through tenth holdings make up 14.1% combined.

Related Link: Exclusive: Top 10 Most Searched Tickers On Benzinga Pro In March, Where Do SPY, AAPL And MSFT Rank? 

Why It’s Important: Since launching in 1993, the SPDR S&P 500 ETF Trust has returned an average annual return of 9.53%, based on data from January.

The ETF posted its worst performance since 2008 with a -19.2% return in 2022. Many of the indexes and stocks have rebounded in 2023, including major technology stocks.

The SPDR S&P 500 ETF is up 9.1% year-to-date in 2023.

Apple and Microsoft are up 35.5% and 27.5%, respectively in 2023, outpacing the returns of the ETF and also helping boost the ETF.

Seen as an ETF to represent the top 500 stocks, the ETF may now be too heavily weighted to the technology sector and to its top holdings. The top two holdings make up more than 13% of the weighting and the top 10 make up close to 28% of the assets.

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