An index can change rather importantly over time. Some segments go through sustained secular performance and become increasingly important on a secular basis. This has happened with the internet relative to much older industries. Sometimes it can be a bubble but for every time someone calls something irrational, there are many cases where something secular is happening.

Below is a chart plotting how much more important Amazon.com is to the performance of the S&P 500 than it used to be. This has come at the expense of names like Exxon.

Recent Data More Important Than Long Term

Another example is Facebook vs Chevron.

. Recent Data Is More Important Than Long Term

Subscribe to our free daily newsletters!
Please enter your email address to subscribe to ETF Trends' newsletters featuring latest news and educational events.