Sponsored Content

White Paper: The S&P Composite 1500®: An Efficient Measure of the U.S. Equity Market

Sponsored by 
S&P Dow Jones Indices

S&P Dow Jones Indices

Phillip Brzenk, CFA, Senior Director, Strategy Indices

Hamish Preston, Associate Director, U.S. Equity Indices

Aye Soe, CFA, Managing Director, Global Head of Product Management


Launched in 1995, the S&P Composite 1500 (hereafter the “S&P 1500”) serves as a benchmark indicator for U.S. equity market performance, aggregating price movements of S&P 500®, S&P MidCap 400®, and S&P SmallCap 600® constituents to deduce common return drivers.

The S&P 1500 also increasingly serves as a basis for constructing portfolios designed to deliver a “market” return at lower cost than those active managers who offer to beat it. We shall examine the S&P 1500 from both perspectives, as well as examining its merits in comparison to popular alternatives. In particular, we observe that:

  • The sizeable representation of U.S. companies means tracking U.S. equity market performance may be relevant to investors, globally;
  • The S&P 1500 has outperformed the S&P 500, historically;
  • Incorporating smaller companies in a U.S. market benchmark provides a more holistic view of the U.S. economy (see Exhibit 7); and
  • Compared with other U.S. equity market indices, the S&P 1500 avoids relatively illiquid, lower priced, and lower quality stocks (see Exhibit 1).

Composite Index

Composite Index

Read the full paper.