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MagazineFortune 500

Why Investors Should Care More About the Fortune 500 Than the S&P 500

By
Matthew Heimer
Matthew Heimer
Former Executive Editor, Features
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By
Matthew Heimer
Matthew Heimer
Former Executive Editor, Features
Down Arrow Button Icon
May 17, 2019, 8:00 AM ET
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In any given year, around 330 companies are included in both the S&P 500 index of large-cap U.S. stocks and the Fortune 500. But the differences between the lists matter in the market. Since 1996, publicly traded Fortune 500 companies have outperformed the S&P by 0.5 percentage points annually, according to Barclays, and using an “equal weighting” strategy, Fortune outperformed by almost two points a year. While the S&P 500 often includes stocks of popular but unproven businesses, a company can’t crack the Fortune 500 until it earns significant revenue; that explains much of the performance gap. Coming soon: products to help investors profit from that advantage.

A version of this article appears in the June 2019 issue of Fortune with the headline “The ‘500’ Investors Should Actually Care About.”

More must-read stories from Fortune:

—The 2019 Fortune 500 list demonstrates the prize of size

—Why the giants among this year’s Fortune 500 should intimidate you

—What the Fortune 500 would look like as a microbiome

—The Occidental-Anadarko merger reveals the crude truth about oil prices

—It’s all clicking for Wayfair, a Fortune 500 newcomer

Get up to speed on your morning commute with Fortune’s CEO Daily newsletter.

About the Author
By Matthew HeimerFormer Executive Editor, Features
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Matt Heimer previously oversaw Fortune's longform storytelling in digital and print and was the editorial coordinator of Fortune magazine.

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