Select an index below to view its top 10 constituents and their respective weightings.
The weight of the top 10 holdings in major US indices over the past decade.
Current distribution of sector weightings across the S&P 500.
Market concentration risk occurs when a small number of companies or a specific sector make up a disproportionately large percentage of an overall market index. This means the performance of the entire index becomes heavily dependent on the fortunes of those few top holdings, reducing the benefits of diversification.
The S&P 500 is market-capitalization weighted, meaning companies with higher valuations receive larger allocations. In recent years, massive growth in mega-cap technology and AI-related companies (often termed the "Magnificent Seven") has significantly outpaced the rest of the market, leading to their outsized representation in the index.
The NASDAQ 100 is historically more concentrated than the S&P 500 due to its focus on non-financial companies and heavy tilt towards the technology sector. In 2023 and early 2024, it became so top-heavy that special rebalances were enacted to redistribute weightings among its largest constituents to comply with SEC diversification rules.
Generally, developed international indices (like VEA) show lower concentration in their top 10 holdings compared to US markets, as they are less dominated by mega-cap tech. However, emerging markets (like VWO) can still exhibit notable concentration around specific national champions or large tech conglomerates (e.g., TSMC, Tencent).
Investors can manage concentration risk by diversifying across different asset classes, utilizing equal-weighted index funds (like RSP for the S&P 500) rather than market-cap weighted ones, or explicitly allocating capital to international equities, small-cap stocks, or value-focused strategies that are underrepresented in top-heavy indices.
Westmount Fundamentals. "Stock Market Concentration Analysis 2026." westmountfundamentals.com/market-concentration-analysis-2026, 2026.