The Standard and Poor's 500 and Fortune 500 are both stock indexes, used as benchmarks for our overall economic health. Both consist of the world's largest corporations, but the two vary in their composition, selection, and performance.
Standard & Poor's 500
Since its inception in 1953, the S&P 500 has been considered by investors to be the main benchmark to gauge the U.S. large cap equities market. All companies in the index are publicly traded on the New York Stock Exchange (NYSE) or National Association of Securities Dealers Automated Quotations (NASDAQ).
The Fortune 500 stock index, introduced in 1999, is a compiled list of the top 500 U.S. companies by revenue. The index is an adaptation of the original list compiled in 1955 by Fortune Magazine.
Since the companies listed on both indexes represent approximately 75 percent of U.S. equities, both indexes are indicators of how the economy as a whole is performing.
Since the S&P 500 and Fortune 500 contain many of the same companies, a 1999-2002 study showed that performance was 99.4 percent correlated.
Looking at historical data dating back to 1992, experts have concluded that the Fortune 500 index is a better investment of the overall market due to slightly better performance and less volatility. This has been attributed to the Fortune 500's selection process based on revenue.
- Financial Advisor Magazine
- Standard & Poor's
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- Fortune. "Methodology for Fortune 500." Accessed Nov. 2, 2020.
- Fortune. "Fortune 500: 1955 Full List." Accessed Nov. 2, 2020.
- Fortune 500. "Walmart." Accessed Nov. 3, 2020.
- Fortune 500. "Amazon." Accessed Nov. 3, 2020.
- Fortune. "Fortune 500." Accessed Nov. 3, 2020.
- Fortune. "History of the Fortune 500." Accessed Nov. 2, 2020.
- Fortune. "Fortune 500: 1995 Full List." Accessed Nov. 2, 2020.
- Fortune. "Walmart Company Profile." Accessed Nov. 2, 2020.
Tommy Doc is a 2007 graduate of the University of Pennsylvania and an aspiring Internet entrepreneur. He was the sports editor for "The Pennsylvania Independent" while attaining his bachelor's degree in communications and environmental science. Doc is from Atlantic City, N.J. but has lived in Philadelphia, San Diego, New York and currently resides in Austin, Texas.