Replies to post #319549 on Zeev's Turnips Patch-No Politics (ZEEV)

[Joe Stocks]

>>Actually, the SPY and QQQ are determined every so often almost "automatically" by taking the 500 and 100 largest market caps companies, <<

The S&P 500 does not include the 500 largest cap stocks. Market cap is just one factor.

Types of Companies: The S&P 500 tries to cover all major areas of the U.S. economy. It is not the 500 largest companies, but rather the 500 most widely held companies--chosen with respect to market size, liquidity, and industrial sector
.
Selection Criteria: Components are chosen by the S&P Index Committee. Anywhere from 25-50 changes are made every year because of mergers or fallouts à la Enron. International companies have been included in the past, but only U.S. companies will be added in the future.

http://www.investopedia.com/university/indexes/index3.asp