In today’s markets, index concentration has reached extreme levels—raising important questions about whether equity benchmarks truly represent the underlying economies they track.
In the U.S., just 10 companies now account for approximately 40% of the total market capitalization of the S&P 500. But the phenomenon is even more pronounced in other countries.
In Germany, the top 10 companies in the DAX make up 58% of the index. In France’s CAC 40, the figure is 62%. In Denmark, pharmaceutical giant Novo Nordisk alone represents 42% of the national index. In Taiwan, TSMC’s weight is approaching 40%.
Such concentration often has little to do with the broader structure of a country’s economy. Canada is a notable example: despite its vast reserves of natural resources (uranium, oil, gas, nickel, potash, copper), the financial sector accounts for 37% of the MSCI Canada Index, while energy represents just 16%, and materials only 12%. A similar picture emerges in Australia and Brazil. In the MSCI Australia Index, financials comprise 42%, compared to 17% for materials. In MSCI Brazil, financials make up 40%, while energy and materials trail at 15% and 12%, respectively. Even in economies traditionally driven by tourism and agriculture, financial firms dominate equity indices. Spain’s benchmark is 44% financials, Italy’s 48%, and Greece’s a striking 64%.