The gap, back to 1970
June 29, 2026 · 5 min read
The concentration signal that matters isn't how big the top 10 are — it's how far their share of index weight now runs ahead of their share of earnings. Here is how wide that gap is, and what happened the only two times it has run this wide before.
Concentration isn't the risk — the gap between price and profits is. The only two times it ran this wide — the late-1960s Nifty Fifty and the 2000 dot-com peak — it unwound painfully. The question is whether this time's stronger fundamentals change the ending.
- •Top-10 weight sits near ~40% of the S&P 500 against ~30% of its earnings — a price story, not a profit collapse.
- •The last two times the gap ran this wide, the decade that followed favoured the equal-weight market over the cap-weighted index.
- •The honest counter: on forward earnings the gap narrows to ~6 points, and unlike 2000 today's leaders sit on real, growing profits.
Read the full Desk issue
The full write-up — the long-history chart, the weight-versus-earnings decomposition, and the Desk’s read — is open to Vercis members. Sign-up is self-serve during the beta.
Hartford Funds (Hartford Equity Modeling Platform) · RBC Wealth Management — The Great Narrowing · Guinness Global Investors (Aug 2025) · CFA Institute — Market Concentration and Lost Decades. Figures as reported; re-verify before relying.
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