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Quarterly Market Insight - Second Quarter 2020

Christopher LaPorta

July 21, 2020

A small group of massive, high profile, technology oriented companies with ubiquitous brands and business footprints has dominated headlines, major U.S. equity indexes and the imaginations of many investors for nearly a decade. We believe the best representation of this phenomenon is the quintet of Facebook, Apple, Amazon, Microsoft and Alphabet (formerly known as Google).
Taken together, “FAAMG” currently comprises roughly 21% of the S&P 500 Index’s market capitalization. Over the five-year period ending June 30, the average cumulative return of the FAAMG stocks was 297.8% compared to the 66.2% return for the broad index. This group’s combined average weight in the index over the last five years was 13.7%, but its members accounted for approximately 36.6% of the benchmark’s cumulative gain during the period. In the first six months of 2020, the average return of the five FAAMG stocks was 24.1% compared to a decline of 3.1% for the S&P 500.

Learn more in the 2020 Second Quarter Market Review.