Why Investors Should Care More About the Fortune 500 Than the S&P 500

In any given year, around 330 companies are included in both the S&P 500 index of large-cap U.S. stocks and the Fortune 500. But the differences between the lists matter in the market. Since 1996, publicly traded Fortune 500 companies have outperformed the S&P by 0.5 percentage points annually, according to Barclays, and using an “equal weighting” strategy, Fortune outperformed by almost two points a year. While the S&P 500 often includes stocks of popular but unproven businesses, a company can’t crack the Fortune 500 until it earns significant revenue; that explains much of the performance gap. Coming soon: products to help investors profit from that advantage.

A version of this article appears in the June 2019 issue of Fortune with the headline “The ‘500’ Investors Should Actually Care About.”

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