Bridge over ocean
1 January 2006 Financial Analysts Journal Volume 62, Issue 1

Long-Term Returns on the Original S&P 500 Companies

  1. Jeremy J. Siegel
  2. Jeremy D. Schwartz

The S&P 500 Index is continually updated, with approximately 20 companies added each year and an equal number dropped. In the study reported here, the returns to all 500 of the original S&P 500 companies and returns to the continually updated index were calculated from March 1957 through 2003. Contrary to earlier research, this study found that the buy-and-hold returns of the 500 original companies have been higher than the returns to the continually updated S&P 500 and with lower risk. Furthermore, the original companies in 9 of the 10 industry sectors outperformed the new companies added to the index.

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