Graphic: Top-heavy U.S.equities

The influence that fewer stocks, particularly tech stocks, have on U.S. markets has been growing as large-cap stocks begin to widen the gap with smaller stocks. As investments in vehicles that track the performance of the S&P 500 are ever more popular, the situation creates shaky ground for investors. U.S. equity performance hinges on a less diversified group of stocks.
Gap widens: The size gap between index members has widened since 2010. The average size of large cap vs. the rest of the market has grown notably as well. Returns in a handful of stocks will have greater leverage on overall returns than they used to.
Unequal weight: The information technology sector is the largest by average S&P 500 market cap, but it also has fewer members than financials or consumer staples.
More volatile: Since the start of 2010, tech stocks have had higher average gains and greater losses than the S&P 500 index. Tech-stock volatility has been higher than the broad index, in line with financials since 2014, but both have diverged higher in 2017.
Active love: Active stretegies' exposures mirror those of their passive peers. Among the holdings in the 10 largest funds, Alphabet is held in all 10, followed by Microsoft (8) and Amazon (6). Amazon has the highest average position at 6.3%; the average Apple position is 4.1%.
Sources: Bloomberg LP; FTSE International; P&I Research Center
Compiled and designed by Charles McGrath and Gregg A. Runburg