The S&P 500 serves as a prominent benchmark for large-cap U.S. equities, encompassing about 80% of investable market capitalization in the U.S. equity market. This index includes 500 leading companies, many of which are among the world’s largest and most well-known companies, with a global reach of operations, customers and revenue sources.
As of the end of 2024, about USD 20 trillion was either indexed or benchmarked to the S&P 500, with indexed assets accounting for approximately USD 13 trillion. The growing popularity and scale of S&P 500-related products—such as index funds, exchange-traded funds (ETFs) and listed derivatives such as futures and options—have led to reduced costs and lower barriers to entry for S&P 500-linked investments over time.
This paper explores the S&P 500 from the perspective of market participants based in South Korea, addressing the following points:
- The significance of the U.S. in the global economy and global equity markets;
- A comparison between the S&P 500 and South Korea’s leading large-cap equity benchmark;
- The potential complementary aspects of the S&P 500 for a broad-based South Korean equity strategy; and
- The differences between the S&P 500 and other indices or actively managed portfolios of U.S. equities.
