Significance of the S&P 500 for Japanese Investors

This document is a technical report that outlines the importance of the S&P 500 index to Japanese investors. It details the global significance of large-cap U.S. equities, emphasizing that the S&P 500 represents a substantial portion of the global equity market, accounting for over 54% of the float-adjusted market capitalization of the S&P Global BMI as of September 30, 2025. The report compares the S&P 500 to the Japanese TOPIX index, noting significant differences in market capitalization, liquidity, and sector weightings. It explains how incorporating large-cap U.S. equities could have historically improved performance for Japanese investors. The document also discusses the trading ecosystem surrounding the S&P 500, estimating that USD 279 trillion was traded within this ecosystem in 2024, which promotes price transparency and market efficiency. The report concludes by highlighting the potential benefits of diversifying into U.S. equities for Japanese market participants.