top of page

What's in an Index?

  • Writer: Mark Nicholas
    Mark Nicholas
  • Jun 6, 2022
  • 1 min read

Updated: Feb 4, 2025

It seems everyone has an opinion on everything these days, but investing in a low-cost index fund seems like an almost universally accepted investing strategy. It’s baffling how many investors choose an index without understanding the types of businesses the underlying holdings are engaged in. Indexing isn’t bad, per se, but choosing the index is an active decision. Here are some facts that might surprise you about the constituents of the S&P 500 index[1]:


  • 424 companies are addressing environmental impacts associated with energy consumption.

  • 370 companies are working to ensure that its culture and hiring practices embrace the building of a diverse and inclusive workplace

  • 211 companies guided philanthropy to organizations advocating for the promotion and acceptance of LGBT lifestyle.

  • 10 companies which produce or distribute pornography.

  • 7 companies that produce abortifacient drugs.

  • 11 companies deriving revenue from gambling activities

  • 7 companies whose primary purpose is to generate revenue from the production, distribution, or sale of alcohol

  • 3 companies involved in the cultivation, processing, or distribution of cannabis


You’ll likely see similar numbers in the funds available in your 401(k) plan! You can look up your investments here by simply entering investment names or ticker symbols.


If you look your funds and have trouble sleeping, click the button below and let's discuss it. Aligning your investments with your values is harder than investing in a popular index, but it’s possible.


[1] Source: Inspire Insight, as of June 6, 2022, using SSgA S&P 500 ETF (SPY) as index proxy.


 
 
 

Comments

Recent Blogs

Your 401(k) Shouldn't Feel Like A Prison Cell

If your 401(k) feels more like a holding tank than a wealth-building tool, it's not just your imagination running wild. Many American workers have their retirement savings trapped in places that limit access, layer on fees, and quietly erode returns.

Read More

When the Referee Buys a Team: The Hidden Risks of America’s New State-Investor Trend

When the government owns part of a company, it faces an unavoidable conflict of interest...The danger isn’t that America suddenly turns socialist—it’s that free enterprise slowly becomes state-dependent. Capitalism works because the game is fair, the rules are known, and the referee doesn’t care who wins. Once the referee owns the team, that trust disappears. And without trust, no market—no matter how wealthy or advanced—can stand.

Read More

Private Equity In Your 401(k)?

The combination of high costs, valuation risk, and a general lack of transparency have kept private investments on the sideline to date - they just haven't been able to clear the prudent investment bar. Loosening regulations likely won't change that without some significant changes in the private equity product space, which won't change overnight. With retirement plan litigation on the rise, why would a fiduciary take the risk on this when they don't have to?

Read More
bottom of page