Stock Market: The top ten stocks account for 38% of the index and 2.7% of the gain

The concentration of the S&P 500 has reached an all-time high. But in the first half of the year, 97% of the index’s gains came from the other 490 stocks, according to a study published on August 27. This puts the criticism of index-tracking portfolios into perspective.
 

This argument has become a common refrain at wealth management meetings: investing in a global index fund is essentially the same as buying seven U.S. tech stocks. The concentration figures back this up. The top ten market-cap stocks in the S&P 500 accounted for 24.20% of the index in 2000, 18.88% in 2010, 26.65% in 2020, and 37.92% in the first quarter of 2026, according to holdings reported by the leading index fund tracking the index. As of the end of July, another benchmark fund brought this weighting to 38.16%. Never before has the U.S. index been so concentrated.
 

It is the second figure that throws the reasoning off. Over the first six months of 2026, the S&P 500 rose from 6,845.50 points to 7,499.36 points, an increase of 9.55%. When each stock’s contribution is calculated based on its weighting as of December 31 and its return over the six-month period, the top ten holdings account for only 0.26 points of this increase—or 2.7% of the total return. The more than 490 other stocks accounted for 97.3% of the return, contributing 9.29 points.
 

Two heavyweights on the decline
The explanation lies in the performance of a few individual stocks. Two of the index’s largest holdings declined over the period: Microsoft by 22.87% and Meta Platforms by 14.67%, offsetting much of the positive contribution from Alphabet, which rose by about 14% depending on the class of shares, Nvidia, up 7.29%, and Broadcom, up 9.15%. Weight concentration and performance concentration are two different things, and they can move in opposite directions.
 

These calculations are based on a study published on August 27 by Ramify, an online asset management firm, using regulatory filings submitted to the U.S. regulator and the holdings disclosed by index funds. The methodology is standard for performance attribution, with its usual limitations: returns in dollars, excluding dividends, and fixed weightings at the beginning of the period. “A concentrated market can remain so and continue to rise for years,” comments Olivier Herbout, co-founder and CEO of the company. “Concentration should not be treated as a sell signal, but as a risk factor to monitor when sizing positions.”
 

What the Choice of Index Means
For a French investor, the practical question isn’t whether to sell tech stocks, but rather to assess what they actually hold. The MSCI World Index, the benchmark for most global asset allocations held in life insurance policies or stock savings plans, comprises 1,282 components and, as of July 31, allocated 26.41% of its weight to its top ten holdings, with Nvidia at 5.18%, Apple at 5.07%, and Microsoft at 3.66%. Its year-to-date return stands at 10.52%.
 

With a comparable structure, Europe presents a different profile: the STOXX Europe 600, with approximately 600 constituents, has a top 10 accounting for 19.55% of the index—nearly half as much as the S&P 500. A comparison with the EURO STOXX 50 would be meaningless, as an index comprising fifty stocks automatically inflates the weight of its top holdings.
 

The history of this ranking, in fact, calls for caution when it comes to extrapolations. In 2000, General Electric and Cisco dominated the top of the S&P 500. In 2010, it was Exxon Mobil. Today, it’s Nvidia, Apple, and Alphabet. All three configurations seemed set in stone at the time, and none lasted ten years. An investor who buys a market-cap-weighted index is buying precisely this rotation mechanism, with all its drawbacks: they hold a lot of what has risen and little of what will rise.
 

The difference in concentration says nothing about the difference in performance, and that’s where the reasoning gets complicated. The S&P 500, on a total return basis, was up 13.76% as of August 27, while the CAC 40 was up about 2% after hitting an intraday record of 8,693 points on August 5 and then falling back to 8,320 points amid concerns over France’s budget. An investor who had shunned U.S. concentration in 2026 would have bought diversification at the cost of lower returns. This is not an argument against diversification; it is the price of diversification, and it must be paid in certain years.