That's because the index is updated every quarter to reflect the latest-and-greatest analyst picks and ratings.
For a complete discussion of index maintenance, click here.
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We’d rather own high-quality businesses than low-quality businesses.
Because we believe that, over the long-term, stronger companies will outperform weaker companies.
Instead of focusing on quality, the S&P 500 blindly picks the market’s largest companies by market cap.
And that means when you buy any financial product tied to the S&P 500, such as an ETF or index fund…yes, you may end up with exposure to some of the best companies in the world…but you may also end up with exposure to some low-quality business for no other reason than these low-quality businesses happen to be big.
Both MFAM and MFWM are investment advisers registered with the SEC.
The point is simply that because the Fool 100 tries to only include high quality companies with smart management teams, we believe that we have a better chance of avoiding exposure to companies like Enron and Lehman Brothers.
And that’s one reason we believe an index of high-quality companies with smart management teams can outperform a portfolio built by blindly picking all 500 of the market’s biggest stocks.
This means that a company can only be included in the Fool 100 after undergoing a painstaking selection and review process by our team of analysts.
This is the same review and selection process that has led to the success of many of The Motley Fool’s publications.Here are a couple of painful examples: Enron was included in the S&P 500 in 2001…and Lehman Brothers was included in 2008.