S&P 500 top 10 near 40% as investors eye international ETFs

Concentration in U.S. equities has increased: the ten largest components of the S&P 500 account for just under 40% of the index, up from roughly 26% in spring 2023. Market participants note that a heavy weight in a small number of stocks can amplify losses if those names weaken or sell off.

Investors seeking to reduce single-market exposure are evaluating international equity funds that exclude U.S. listings. One such product is the American Century Quality Diversified International ETF, ticker QINT, which offers exposure to large- and mid-cap stocks outside the United States.

QINT tracks the American Century Quality Diversified International Equity Index. The index applies a quality screen that favors companies with stronger balance sheets, consistent growth metrics and stable fundamentals. The methodology allows the index to tilt between value and growth exposures based on market conditions.

The ETF carries a 0.34% expense ratio. Data from ETF Database show QINT returned 22.7% over the trailing 12 months, outperforming the average for foreign large-cap equity ETFs over the same period. Technical indicators from YCharts indicate the fund’s price is near its 50-day and 200-day simple moving averages, a measure some traders use to assess momentum.

Shifting part of an equity allocation to non-U.S. markets reduces reliance on the performance of a few large U.S. companies but introduces country-specific and currency risks. VettaFi LLC is the index provider for the fund and receives an index licensing fee; VettaFi is not the issuer, sponsor, endorser or seller of QINT and has no obligation or liability related to the ETF’s issuance, administration, marketing or trading.