Wednesday, August 26, 2020

S&P 500's mega-cap companies

The S&P 500 Index’s biggest companies are far from regaining the strength they showed 20 years ago. That’s evident from the ratio between the S&P 500 and an equally weighted version, which counts each stock the same. The ratio tumbled 53% between March 2000 and April 2015 on a total-return basis, which includes dividends, according to data compiled by Bloomberg. Since then, the gauge has only recouped about a fifth of its decline. “Long-term history isn’t necessarily kind to owning mega cap” stocks, Jim Reid, a global strategist at Deutsche Bank AG, wrote Tuesday in a note with a similar chart.

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