S&P 100 vs S&P 500: A Detailed Comparison

Introduction

The S&P 100 and S&P 500 are two of the most widely followed stock market indexes in the world. Both indexes are composed of large-cap stocks, but there are some important differences between them. In this article, we will compare the S&P 100 and S&P 500 in terms of their composition, performance, and risk characteristics.

Composition

The S&P 100 is composed of the 100 largest companies by market capitalization in the United States. The S&P 500 is composed of the 500 largest companies by market capitalization in the United States. As a result, the S&P 500 is more diversified than the S&P 100, as it includes a wider range of industries and sectors.

Performance

The S&P 500 has outperformed the S&P 100 over the long term. Over the past 10 years, the S&P 500 has returned an average of 10% per year, while the S&P 100 has returned an average of 9% per year. This difference in performance is due to the fact that the S&P 500 is more diversified than the S&P 100.

Risk Characteristics

The S&P 100 is more volatile than the S&P 500. This is because the S&P 100 is composed of a smaller number of stocks, which means that it is more susceptible to the performance of individual stocks. The S&P 500 is more diversified, which means that it is less susceptible to the performance of individual stocks.

Which Index is Right for You?

The S&P 100 and S&P 500 are both good investment options, but they have different risk and return profiles. The S&P 500 is more diversified and less volatile than the S&P 100, but it has also returned a lower average return over the long term. The S&P 100 is more volatile and less diversified than the S&P 500, but it has also returned a higher average return over the long term.

The best index for you depends on your investment goals and risk tolerance. If you are looking for a more diversified and less volatile investment, the S&P 500 is a good option. If you are looking for a more volatile and potentially higher-return investment, the S&P 100 is a good option.

Conclusion

The S&P 100 and S&P 500 are two of the most widely followed stock market indexes in the world. Both indexes are composed of large-cap stocks, but there are some important differences between them. The S&P 100 is more concentrated and volatile than the S&P 500, but it has also returned a higher average return over the long term. The S&P 500 is more diversified and less volatile than the S&P 100, but it has also returned a lower average return over the long term. The best index for you depends on your investment goals and risk tolerance.