S&P 500 concentration raises risks for index investors

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  The S&P 500’s 10 largest holdings now make up nearly 40 per cent of the index, raising concerns about concentration for index investors.

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  The Globe and Mail article says passive funds control more than 50 per cent of U.S. domestic equity-fund assets.

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  It argues that market-cap-weighted inflows can amplify trends by directing new money toward companies whose share prices have already risen.

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  The article says the index has become a concentrated bet on the success of artificial intelligence and the returns on large investments in it.

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  It notes that low-cost index funds still offer advantages, but says their holdings may not provide true diversification.

Who

Investors in passive funds, particularly funds tracking the S&P 500.

What

The index’s concentration in a small number of large companies may expose investors to greater risk and less diversification.

When

The article was published on October 12, 2026.

Where

The U.S. equity market, particularly the S&P 500.

Why

The index’s top 10 holdings account for nearly 40 per cent of it, while passive fund flows can direct new money toward companies that have already risen.

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