SP500 return vs top 10 companies in sp500 returns

J

john7722

Hello,

I was wondering if there is an ETF that tracks only top 10 companies in sp500 by market cap. If not , how would one calculate the return of only top 5 or top 10 companies going as far as possible in the past . It looks like a lot of work doing it year by year. Any short cuts?

thank you.
 
You could fairly trivially code a strategy and backtest it that does this, e.g. on QuantConnect. The only tricky part is getting S&P500 membership data which is paywalled beyond the most recent years.
 
Norgate data provides the constituent history at a fairly reasonable price. I don't think this data would include market cap info so you would have to go back over the years and figure out the top 10 companies at any given time. May take a while but it's definitely doable. I know a number of traders that use Norgate combined with AmiBroker to backtest something like this.
 
john7722 said:
Hello,

I was wondering if there is an ETF that tracks only top 10 companies in sp500 by market cap. If not , how would one calculate the return of only top 5 or top 10 companies going as far as possible in the past . It looks like a lot of work doing it year by year. Any short cuts?

thank you.
More...

I actually had this same idea this past week. The hard part is getting market cap or outstanding shares time series data. If anyone knows a good free or reasonably-priced source, I would be interested.

Now for the idea itself: it seems obvious that everyone and their mom wants to chase mega-cap growth companies today since they absolutely killed it this past year (AAPL up 72% YTD). I think it's pretty likely that these companies will be bearish/neutral for 2021 given their insane returns in 2020.
 
It would be interesting to figure it out.
i am not that good with back testing programming. Nevver done it.
But i would be curious of returns from all major index from sp500 ,nasdaq to russell , to see if top 5 or 10 are outperforming their indexes. If they are, then it would be really interesting if someone made an ETF that tracks it.
 
john7722 said:
Hello,

I was wondering if there is an ETF that tracks only top 10 companies in sp500 by market cap. If not , how would one calculate the return of only top 5 or top 10 companies going as far as possible in the past . It looks like a lot of work doing it year by year. Any short cuts?

thank you.
More...

Invesco S&P 500® Top 50 ETF (XLG) might be close.
https://etfdb.com/etf/XLG/#holdings
upload_2020-12-20_20-20-5.png
 
john7722 said:
Hello,

I was wondering if there is an ETF that tracks only top 10 companies in sp500 by market cap. If not , how would one calculate the return of only top 5 or top 10 companies going as far as possible in the past . It looks like a lot of work doing it year by year. Any short cuts?

thank you.
More...

I ran a portfolio like that for a while, backtesting it by hand. I don't have the results handy, but they were positive.
 
john7722 said:
Hello,

I was wondering if there is an ETF that tracks only top 10 companies in sp500 by market cap. If not , how would one calculate the return of only top 5 or top 10 companies going as far as possible in the past . It looks like a lot of work doing it year by year. Any short cuts?

thank you.
More...

If the idea is that the larger companies are more profitable, there are SP100 products (e.g. OEX) that you can trade. From what I recall they don't do as well as the SP500.
 
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