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Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →To compare technology stocks with the broader market, define both indexes first, then measure them over the same dates, in the same currency, and using the same return convention. Put returns beside volatility, drawdowns, and concentration: a sector index can outperform over one historical window while also exposing investors to larger swings and a narrower set of companies. None of these past results predicts future performance.
Choose what “technology” and “the broader market” mean
There is no single universal technology-stock basket. Index providers use different constituent rules and classifications, so two indexes with “technology” in their names may not represent the same companies.
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A U.S. large-cap comparison
One clear U.S. example is the information technology sector within the S&P 500 compared with the S&P 500 itself. The S&P 500 includes 500 leading companies and covers approximately 80% of available U.S. market capitalization, according to S&P Dow Jones Indices. S&P describes it as “widely regarded as the best single gauge of large-cap U.S. equities.” It is a large-cap U.S. benchmark—not the whole U.S. stock market or the global market.
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Check each index’s rules
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 interchangeable with the S&P 500 Information Technology sector, nor does either necessarily include every business commonly called a technology company.
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Make the return comparison like-for-like
Before comparing performance, fix the start date, end date, currency, and index series. Use either price returns or total returns for both indexes. Total return accounts for reinvested distributions; comparing it with a price-only series can make the difference look larger or smaller for reasons unrelated to the underlying share-price movements. For a cumulative-return chart, rebase both series to the same starting value.
Annualized returns also need a stated period and method. A June 2026 Goldman Sachs supplement filed with the SEC illustrates rebasing three indexes to 100.00 on January 4, 2021, and describes annualized return as the geometric average of percentage changes over the applicable period. The filing warns that historical index returns are not an indication of future performance. Its historical closing levels came from Bloomberg Financial Services and were not independently verified by the filing’s preparer. Read the June 2026 SEC-filed supplement.
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One dated example—not a universal ranking
The same Goldman Sachs & Co. LLC supplement reports the following annualized returns for periods ending June 1, 2026:
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1Fix the driver behind crashes, sound loss and screen glitches2Clear out junk files and repair common Windows errors3Scan for outdated or missing drivers - takes under a minute| 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% |
These figures show how the apparent gap changes with the measurement window: the technology-sector index led substantially over one year, while its five-year and since-January 2021 figures were close to the Nasdaq-100’s. The Nasdaq-100 Technology Sector Index is a specific index, not a stand-in for all technology stocks. All figures are historical annualized returns through June 1, 2026, not forecasts.
Measure risk alongside return
“Risk” is broader than volatility. A useful comparison includes annualized standard deviation over matching periods, 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 period, return basis, and risk-free-rate convention are disclosed.
Volatility and Sharpe ratio
MSCI’s data as of September 30, 2026, reports these annualized standard deviations and Sharpe ratios for the MSCI USA Information Technology Index and MSCI ACWI IMI:
| Measure and period | MSCI USA Information Technology Index | MSCI ACWI IMI |
|---|---|---|
| Annualized standard deviation, 3 years | 21.33% | 12.22% |
| Annualized standard deviation, 5 years | 23.34% | 15.06% |
| Annualized standard deviation, 10 years | 20.81% | 14.97% |
| Sharpe ratio, 3 years | 1.36 | 1.28 |
| Sharpe ratio, 5 years | 0.81 | 0.53 |
| Sharpe ratio, 10 years | 1.06 | 0.67 |
For each duration, the technology index had higher reported standard deviation, while its Sharpe ratio was also higher in this data set. These statistics describe the indexes and windows shown; MSCI ACWI IMI is a global all-cap comparison, not the same benchmark as the U.S. large-cap S&P 500. See MSCI’s index page for the dated statistics.
Drawdown and dates matter
MSCI lists a maximum drawdown of 81.10% for the 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 are each index’s listed maximum drawdown over its history, but they occurred in different episodes. They do not show how the indexes compared during the same market event.
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Check concentration and weighting
A capitalization-weighted sector index can be heavily influenced by a handful of very large companies. In MSCI’s USA Information Technology Index, the September 30, 2026 weights were NVIDIA 20.16%, Apple 18.78%, and Microsoft 13.89%. Together, those three represented a substantial share of that index on that date; the weights can change and do not describe every technology index.
Equal weighting offers a useful sensitivity check. The 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 capitalization weighting, this reduces the largest companies’ influence and gives smaller constituents more influence. It therefore answers a different question, rather than providing a universally better version of the same index. S&P lists the Invesco S&P 500 Equal Weight Tech ETF (RSPT) as an index-linked product.
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A practical comparison checklist
- Define the universe: name the index and classification rules, rather than relying on the broad label “technology.”
- Choose a fitting benchmark: make clear whether it represents U.S. large caps, U.S. stocks more broadly, or global equities.
- Align the data: match dates, currency, and price-return or total-return basis; state the annualization method for returns.
- Compare more than gains: report return beside volatility and drawdown, with the drawdown dates.
- Inspect concentration: identify the largest weights and consider whether an equal-weight comparison changes the picture.
- Date-stamp the result: index membership, weights, and risk statistics change over time; present them with the publisher and measurement date.
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