Top Capitalization Quintile or Else!
Chart of the Week for October 22-28, 1999
| Market Capitalization (millions) | Number of Stocks | One-Year Price-Only Return | One-Year Relative-Price Performance | % of S&P 500 |
|---|---|---|---|---|
| $248-$3,050 | 100 | 3.1% | -24.7% | 1.7 |
| $3,051-$5,769 | 100 | 16.0% | -11.8% | 4.1 |
| $5,770-$9,934 | 100 | 15.0% | -11.0% | 7.5 |
| $9,935-$25,005 | 100 | 31.6% | 3.8% | 14.7 |
| $25,006-$462,218 | 100 | 52.5% | 24.7% | 72.2 |
| 500 | 27.8% | |||
Note: Date as of September 30, 1999 |
ICMA-RC |
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The S&P 500 Index is widely regarded as the standard for measuring large-cap U.S. stock market performance. This popular index includes a representative sample of leading companies in a broad range of industries. More than $750 billion is indexed to the S&P 500.
The S&P 500 Index has returned 27.8% over the past year ending Sept. 30. And over this time period, the larger the company, the more likely it was to outperform the Index as a whole. Clearly, most securities with a market capitalization in the bottom 60% of the Index significantly underperformed the Index. Despite this large group of underperformers, the S&P 500 has posted strong returns because it is capitalization-weighted, meaning the larger the company, the greater influence it has on the Index.
One important implication of this data is the effect on active manager performance. A large-cap active manager who did not hold the mega-cap superperformers in the top quintile may have underperformed an S&P 500 benchmark by a wide margin.
* This information is being provided for educational purposes and is not intended to be construed as or relied upon as investment advice. ICMA-RC does not offer specific tax or legal advice. Individuals are advised to consider any new investment strategies carefully prior to implementing. Past performance does not guarantee future results. Investment returns and principal value will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data illustrated. For performance data current to the most recent month end, contact ICMA-RC Services, LLC by calling 1-800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240, or by visiting www.icmarc.org. Please consult both the current Vantagepoint Funds prospectus and MAKING SOUND INVESTMENT DECISIONS: A Retirement Investment Guide carefully for a complete summary of all fees, expenses, charges, financial highlights and investment objectives, risks and performance information prior to investing any money. Vantagepoint securities are distributed by ICMA-RC Services LLC, a broker dealer affiliate of ICMA-RC, member NASD/SIPC. For a current prospectus, contact ICMA-RC Services LLC, 777 North Capitol Street NE, Washington, DC 20002-4240. 1-800-669-7400.