Big Companies Showing Strong Returns
In recent data, we see a very clear trend in the market. The largest companies in the U.S. have shown very strong returns.
The top 25 companies gave an average return of around 22%. This means that the biggest names in the market have continued to grow and reward investors in a solid way.
The Main Index Looks Good, But the Gap Is Big
The overall S&P 500 index showed a return of about 13.6%. This may look good at first, but it hides a very important point. The index is based on market-cap weight, so bigger companies get more weight. Because of this, the strong performance of large companies pulls the whole index up, even if the rest of the companies are not doing well.
Equal Weight and Small Companies Showing Weakness
When the same S&P 500 is looked at in equal weight, the return drops to around 7.6%. And if we look at the 250 smallest companies inside the S&P 500, the return is actually negative, around –2.8%. This shows a clear gap between the biggest and the smallest companies. Large companies are pulling ahead, while smaller ones are finding it hard to perform.
The Same Pattern Seen in India Too
This is not only happening in the U.S. A similar pattern is visible in India as well. The top 250 companies, or even the top 50, have shown strong performance in the past year. But the next 250 companies, which are part of the small-cap segment, are still far away from their all-time highs. This shows that the market is growing unevenly.
Why This Big Difference Is Happening
A major reason for this gap seems to be the flow of money. Large companies are getting more money from institutional investors, while retail investors mostly invest in smaller companies. Because institutional money is usually bigger and more stable, it helps large companies perform better. This creates a wide difference between the top companies and the rest.
A Market Moving in Two Directions
Overall, the market today is moving in two different directions. Big companies continue to rise, while many smaller companies struggle. This trend is visible in both the U.S. and India. It will be interesting to see how this gap changes in the coming months.
