The Vanguard S&P 500 ETF (VOO) and SPDR S&P 500 ETF (SPY) hold hundreds of companies each, but their value now leans heavily on a handful of names. The top 10 holdings account for 38% of the fund, with Nvidia and Apple ranking as the two largest weightings — a concentration investors should weigh before buying in.
A handful of stocks carry the fund
The S&P 500 is a market cap-weighted index, meaning the largest companies hold the most sway. That structure has left the Vanguard S&P 500 ETF (VOO) and SPDR S&P 500 ETF (SPY) unusually top-heavy.
As of July 31, 2026, Nvidia carries the largest weighting at 7.55%, followed by Apple at 7.04% and Microsoft at 5.36%. Amazon, Alphabet's two share classes, Broadcom, Meta Platforms, JPMorgan Chase, and Berkshire Hathaway round out the rest of the top 10. Together, those 10 companies make up 38% of the fund's total value. The top three alone account for 20%.
That weighting has paid off as long as the biggest names keep growing. Nvidia has averaged annual gains of 70% over the past three years, and its rise has pulled the broader index up with it. But the same math cuts the other way if a market correction hits big tech harder than the rest of the market.
Smaller companies barely move the needle
Because the fund is so top-heavy, gains from smaller constituents barely register. Costco ranks 27th in the index but carries just a 0.57% weighting, while Walt Disney and McDonald's each sit at 0.26%. Starbucks, FedEx, Dollar Tree, and Skyworks Solutions carry even smaller shares, with Skyworks at just 0.02% as of Sept. 9, 2026.
Even if one of these smaller names tripled in value, the fund's overall return would barely shift. That leaves investors seeking broader diversification exposed to the fortunes of a small group of mega-cap technology stocks rather than the 500 companies the fund's name implies.
An equal-weight alternative
Investors uneasy with that concentration have an alternative: the Invesco S&P 500 Equal Weight ETF (RSP). Its 500 holdings are rebalanced quarterly so that, between rebalancings, smaller companies like FedEx and Costco can influence the index about as much as Nvidia and Apple. That structure trades exposure to mega-cap momentum for a more even split across the index.
Source: Motley Fool
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