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Choose what “technology” and “the broader market” mean
There is no single index that represents every company people call a technology stock. Index providers use different rules and constituents, so a comparison is only meaningful when the index names and classifications are explicit.
A U.S. large-cap comparison
One practical U.S. illustration is the information technology sector of the S&P 500 compared with the S&P 500 itself. The sector universe consists of S&P 500 companies classified in information technology under GICS. S&P Dow Jones Indices describes the S&P 500 as covering 500 leading companies and approximately 80% of available market capitalization; it is a large-cap U.S. benchmark, not the entire U.S. stock market or the global market. S&P Dow Jones Indices calls it “widely regarded as the best single gauge of large-cap U.S. equities.” S&P 500 overview
Index labels are not interchangeable
The MSCI USA Information Technology Index, for example, is designed to capture large- and mid-cap U.S. equities classified in the information technology sector under GICS. It is not automatically the same basket as the S&P 500 Information Technology sector, nor does either index include every business commonly described as a technology company. Choose a definition that fits the question, and name it rather than using “tech stocks” as though it were universal. MSCI USA Information Technology Index
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Make the return comparison fair
Use one start date and end date for both indexes, and align their currency and return series. State whether you are using price return or total return; total return accounts for reinvested distributions. Do not compare one index’s price return with another’s total return. For a cumulative-return chart, rebase both series to the same starting value. For annualized return, give the exact period and method.
A June 2026 Goldman Sachs supplement filed with the SEC illustrates rebasing index series to 100.00 on January 4, 2021, and describes annualized return as the geometric average of percentage changes over the relevant period. The filing cautions that historical returns are not an indication of future index performance. SEC-filed Goldman Sachs supplement
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One dated example shows why the window matters
The following annualized returns were reported in that supplement for periods ending June 1, 2026. They compare the S&P 500 with two Nasdaq indexes, not a universal technology-stock basket. The Nasdaq-100 Technology Sector Index is a specific index with its own selection rules.
| Index | 1 year | 3 years | 5 years | Since Jan. 4, 2021 |
|---|---|---|---|---|
| S&P 500 Index | 28.56% | 21.66% | 12.58% | 14.24% |
| Nasdaq-100 Index | 42.98% | 28.32% | 17.45% | 17.62% |
| Nasdaq-100 Technology Sector Index | 69.88% | 32.46% | 17.48% | 17.64% |
All figures are annualized returns reported by Goldman Sachs & Co. LLC in its 2026 supplement filed with the SEC; every period ends June 1, 2026. The one-year figure covers the year ending on that date. The differences across periods show that the answer to “Have technology stocks outperformed?” depends on the indexes and dates selected—not just the label “technology.” The filing also says historical performance is not predictive of future results. SEC-filed Goldman Sachs supplement
Measure risk beyond volatility
Volatility describes how widely returns have varied; it is not a complete measure of risk. For each index, compare annualized standard deviation over the same period, maximum drawdown and its dates, and the weight of the largest constituents. A Sharpe ratio can add context about return relative to volatility, but only when the return basis, risk-free-rate convention and measurement period are disclosed.
Volatility and Sharpe ratios need matching windows
MSCI’s data as of September 30, 2026, report the following annualized standard deviations and Sharpe ratios for the MSCI USA Information Technology Index and MSCI ACWI IMI:
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| Period | USA Information Technology standard deviation | ACWI IMI standard deviation | USA Information Technology Sharpe ratio | ACWI IMI Sharpe ratio |
|---|---|---|---|---|
| 3 years | 21.33% | 12.22% | 1.36 | 1.28 |
| 5 years | 23.34% | 15.06% | 0.81 | 0.53 |
| 10 years | 20.81% | 14.97% | 1.06 | 0.67 |
These are MSCI’s reported figures as of September 30, 2026, for the periods shown. The higher standard deviation in each listed window indicates greater historical variability for the technology index than for this global all-cap comparison index during those windows. The Sharpe ratios provide a different comparison, not a guarantee that one index offers a better investment. MSCI index data
Drawdowns need dates and context
MSCI lists a maximum drawdown of 81.10% for its USA Information Technology Index from March 31, 2000, to October 9, 2002, and 58.59% for MSCI ACWI IMI from October 31, 2007, to March 9, 2009. These maxima occurred in different market episodes, so they do not show which index lost more during the same event. For an apples-to-apples stress comparison, calculate both indexes’ losses over a shared event or shared measurement window. MSCI index data
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Check concentration as well as sector exposure
A capitalization-weighted index gives larger companies more influence, so a sector index can behave partly like a handful of its biggest holdings. In MSCI’s USA Information Technology Index, as of September 30, 2026, NVIDIA represented 20.16%, Apple 18.78%, and Microsoft 13.89%. Those three weights together show substantial exposure to a small number of companies; they apply to that index on that date, not to every technology index. MSCI index data
Use equal weighting as a sensitivity check
S&P’s S&P 500 Equal Weight Information Technology Index assigns equal weights to S&P 500 constituents classified in the GICS information technology sector. Compared with a capitalization-weighted sector index, equal weighting reduces the largest companies’ influence and gives smaller constituents more influence. That changes the question being answered; it does not make one weighting method universally superior. S&P lists the Invesco S&P 500 Equal Weight Tech ETF (RSPT) as an index-linked product. S&P 500 Equal Weight Information Technology Index
A practical comparison checklist
- Name the universes. Specify the sector index, its classification rules, and the broad benchmark. Do not assume indexes with similar names have identical constituents.
- Set the scope. State the geography, currency, start and end dates, and whether returns are price or total returns.
- Compare returns consistently. Rebase cumulative-return series to a common starting value; label annualized returns with their periods and calculation method.
- Put risk beside return. Include annualized volatility, maximum drawdown with dates, and—if useful—Sharpe ratios with their conventions.
- Inspect concentration. Report major constituent weights and consider an equal-weight comparison if the influence of the largest companies matters to the question.
- Date-stamp the evidence. Index composition, weights, performance and risk statistics change; identify each source’s data date and publisher.
What a comparison can—and cannot—tell you
A well-defined comparison can show how particular indexes behaved over a selected historical period and whether their returns came with different volatility, drawdowns or concentration. It cannot establish that all technology stocks outperformed, that technology will remain riskier, or that past performance will continue. The answer is specific to the chosen indexes, period and measurement conventions.
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