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The S&P 500^® has long been seen as the gauge for U.S. large-cap equities. Market participants seeking broader global exposure often turn to developed market indices, like the S&P World Index. However, over the past decade, developed market benchmarks have seen a notable shift: U.S.-domiciled stocks have increased their weight substantially, representing 72% of the S&P World Index as of year-end 2024 (see Exhibit 1).
 

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Truly U.S.?

This trend highlights the growing importance of the U.S. in the global market and is a consequence of the strong performance of the U.S. market in recent years. Yet, this raises an important question—how global is U.S. exposure, really? And, conversely, how much of it comes from the U.S.? Analyzing revenue streams from companies in The 500™ reveals an international dimension. With less than 60% of revenue in The 500 generated domestically, international markets represent a material revenue source.
 

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Presenting the S&P 500 U.S. Revenue Leaders Index

To limit global exposure and provide a more precise representation of U.S. domestic revenue-driven companies, we recently launched the S&P 500 U.S. Revenue Leaders Index. This index focuses on where companies generate their revenue, including only those that derive at least 50% of their revenue from domestic sources.
 

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Sector Difference

An interesting feature of this index is its weighting scheme. The S&P 500 U.S. Revenue Leaders Index rebalances quarterly, in line with its benchmark, but unlike The 500, the index utilizes a modified float-adjusted market capitalization weighting, with sector weights constrained to +/-5% compared to the benchmark.

This is because the level of domestic revenue generation varies significantly across different GICS^® sectors. For instance, the Utilities sector is unsurprisingly domestic focused, with companies generating almost the entirety of their revenues in the U.S., whereas Information Technology and Materials companies have more global operations, with domestic revenues representing only 44% and 48% of their revenues, respectively.
 

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This differentiation necessitates the use of sector weight constraints to maintain the proportional representation of sectors broadly in line with The 500, reducing the disproportionate impact of any specific underweighted or overweighted sector.

Introducing sector weight constraints allows for a reduction of the active weight difference compared to The 500 and provides a more useful comparison to its benchmark, as well as a more accurate representation of the U.S. economy. By limiting sector weight variations, the index guards against disproportionate influence from any single sector. Comparing the sector weights at the end of March 2025, we observe that Information Technology and Communication Services were underweighted in the S&P 500 U.S. Revenue Leaders Index, whereas Health Care and Financials were more prominently represented (see Exhibit 5).
 

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Conclusion

The S&P 500 U.S. Revenue Leaders Index tracks large-cap U.S. companies with at least 50% of their revenue exposure to the U.S. The index focuses on domestic economic activities, catering to those seeking more focused U.S. economic view. By employing sector-specific constraints, the index balances a higher exposure to more domestically focused sectors with maintaining a similar risk and performance profile to the benchmark.
 

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