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Point of View · 12.18.23

S&P 500 Index Rebalance: Uber Addition Boosts Weight of Transportation

The addition of rideshare company Uber to the S&P 500 index notably impacted the sector and industry composition.
  • Index Equity
  • Equity Insights
Key Points
What this is
We analyze the additions, deletions and weighting changes of S&P 500 companies for S&P’s December rebalance.
Why it matters
Quarterly changes in indexes over time can impact the composition and performance.
Where it's going
The addition of Uber, already with above‑average market capitalization, demonstrates the importance of understanding index eligibility rules.
Main Point

Why Index Rebalances Matter

This rebalance has shown that eligibility requirements can prove impactful because growth companies can reach significant market capitalizations prior to turning a consistent profit, as was the case with Uber this month and Tesla three years ago. Attentive analysis is crucial to understand how an impending index rebalance will shape the index, and by extension, the portfolios that track it.

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