Concentration Struggles

Relative to history and relative to the rest of the world, the US stock market is top heavy

Key Takeaway: As most stocks have struggled in 2023, the S&P 500's continued resiliency is more reliant on just a handful of stocks than at any point in the recent past.

More Context: The two largest stocks in the S&P 500 account for more than 14% of the index. For the third time in the past four years, the top 10 stocks make up more than 30% of the index. Over the two prior decades, it had never exceeded 26% and more often than not was 20% or lower.

US Exceptionalism: This top-heavy concentration in the US is not just historically unique, MSCI data suggests it is out of step with the rest of the world.