The chart illustrates the varying degrees of dependence on foreign revenue among different indices: Russell 2000, Equal-Weight S&P 500, and S&P 500. Notably, the S&P 500 shows the highest reliance on foreign sales, with 41% of its revenue coming from outside the U.S. This is in stark contrast to the Russell 2000, which earns only 24% of its sales from foreign markets. The Equal-Weight S&P 500 falls in between, with 31% of its revenue derived from international sources. This pattern suggests that larger companies within the S&P 500 are more globally integrated, leveraging international markets to a greater extent than smaller companies in the Russell 2000. The data highlights a significant trend: as company size increases, so does the proportion of foreign revenue. This could be attributed to the global reach and brand recognition of larger firms, enabling them to capture market share beyond domestic borders. The findings underscore the importance of international markets for large-cap companies, while smaller firms remain more domestically focused. This divergence in revenue sources may influence investment strategies, as investors seeking exposure to global markets might favor the S&P 500, whereas those preferring domestic-centric investments might lean towards the Russell 2000.
