S&P 500 Concentration & Direct Indexing: What You Need to Know
The S&P 500’s top 10 holdings now make up 37.43% of the index, led by tech giants Apple (7.44%), NVIDIA (6.85%), and Microsoft (6.28%). This historic concentration level creates risk but also opportunity.
Direct indexing lets investors build their own index, controlling exposure to these mega-caps while harvesting tax losses at the individual stock level. As costs decline, this strategy becomes increasingly accessible for investors seeking to manage concentration risk while maintaining broad market exposure.
Consider this approach if you want more control over your market exposure and tax efficiency in today’s concentrated market environment.