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The S&P 500^®, commonly referred to as The 500™, underwent its latest quarterly update—commonly known as rebalances—at the end of last week. S&P 500 rebalances take place after the close of the third Friday of the quarter-ending month and can involve constituent changes (additions and deletions) as well as updates to company characteristics, such as changes to the number of shares outstanding to reflect the latest publicly available data.

Recently, many market participants were surprised to see, or rather not to see, any S&P 500 constituent changes coinciding with the June 2025 rebalance. A cursory glance at recent history suggests there is some justification for these reactions: each quarterly update between June 2022 and March 2025 coincided with announced additions and deletions for the S&P 500.

However, there is more than just historical precedent for a quarterly update without S&P 500 index additions and deletions—it has been a very common outcome! Around 90% of the nearly 800 S&P 500 constituent changes since 1995 did not take place on the third Friday of the quarter-ending month. Exhibit 1 shows that there were many years with zero constituent changes on these dates, demonstrating that S&P 500 rebalance turnover was typically driven by updates to company characteristics.

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The timing of historical constituent changes reflects several important points. First, S&P 500 additions and deletions occur on an ongoing, as needed basis rather than on set reconstitution or rebalance dates. Second, around 70% of deletions since 1995 were caused by corporate events—such as mergers and acquisitions—that affected the index constituents’ eligibility. The index committee responsible for maintaining the S&P 500 has no control over the timing of these events, but any resulting index deletion necessitates a corresponding addition to maintain the index’s 500 company count.

Exhibit 2 further illustrates these points by comparing: a) the number of mergers and acquisitions (M&A) by S&P 500 companies (blue bars), and b) the proportion of S&P 500 constituent changes that took place between quarterly updates (orange line) since 2012. Given that M&A activity drove many constituent changes, it is perhaps unsurprising that years with higher (lower) M&A activity typically saw a greater (lower) proportion of changes take place between standard quarterly updates.

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Additionally, it is important to recognize that index additions are not guaranteed when companies meet the eligibility criteria outlined in the S&P U.S. methodology document: the index committee is also mindful of sector balance and index turnover. Hence, existing constituents that may appear to violate one or more of the addition criteria are not automatically removed from the S&P 500, which helps to explain why we did not see elevated turnover in the S&P 500 in 2020. Indeed, Exhibit 3 shows that the one-way capitalization-weighted turnover for the S&P 500 in 2020 (4.17%) was in line with the long-term average since the early 1990s.

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Although many market participants may have expected constituent changes at the June 2025 rebalance, relatively few constituent changes have taken place on the third Friday in March, June, September and December since 1995. This reflects the fact that the timing of many S&P 500 index changes was driven by corporate events, and that index changes are not guaranteed.

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