S&P 500 index performance entirely attributable to five stocks

The S&P 500 index's performance is more than 100 percent attributable to the stocks of the ten most popular technology companies, according to the S&P 500 index. Concludes the research team of the American investment bank Goldman Sachs.

Amazon's stock alone accounted for more than a third of the S&P 500's total return over the first half of this year. The company's stock is up 45% over the period, while the total S&P 500 index including dividends is up 2.65% this year. If we remove the ten best-performing companies from the index, the positive return turns into a negative return.

Another interesting fact is that Amazon, Microsoft, Apple and Netflix together account for 84% of the return of the S&P 500 index, which means that the stock market value of most companies in the index has not risen or even decreased. If we exclude the so-called FAANG stocks, we arrive at a return of -0.73% for the first half of this year. This is clearly visible on the following graph.

Excluding the big tech companies, the S&P 500's return was negative (Source: Goldman Sachs, via Zero Hedge)

Luxury Goods & Technology

If we look at the different sectors within the S&P 500 index, we see that producers of durable goods, technology companies and the energy sector are the best performers. The companies that made a negative impression on investors over the past year can be found in sectors such as food, telecom, industrials and financials.

If we take a step back and compare the performance of the S&P 500 index with that of other asset classes, we see that long-term government bonds and precious metals have also yielded little this year. As an investor, you could get much more returns in the first half of this year with the VIX, a well-known gauge of volatility in the stock market. This gauge benefited from the correction at the beginning of the year and from increased uncertainty due to tightening central bank policy and the threat of a trade war.

Precious metals are lagging behind

In a flight to safe havens, investors currently seem to prefer the dollar over precious metals such as gold and silver. The gold price has fallen somewhat in recent weeks and at the time of writing is at its lowest level since the end of last year. Investors are opting for riskier investments and avoiding precious metals.

Technology sector stocks were the most popular among investors (Source: Goldman Sachs, via Zero Hedge)

Government bonds and gold also yielded little this year (Source: Goldman Sachs, via Zero Hedge)