Blue Chip Stocks vs. the S&P 500: 28 Years of the Dow 30 Against the 500, Computed
How 30 blue chips compare with the full S&P 500, measured on the oldest ETF tracking each index from January 1998 to October 2026: return with dividends, crashes and the years each one led. Plus what changes when you buy individual blue chips, index funds or active mutual funds instead.
On this page
Blue chip stocks are the shares of large, established, financially solid companies. There is no official list and no rule that grants the status. To compare blue chips with the S&P 500 on numbers rather than impressions, this page uses the Dow Jones Industrial Average, the index built as a list of 30 blue chips, and measures it against the S&P 500 through the two index ETFs that have tracked them since the 1990s.
What counts as a blue chip, and what is in the S&P 500
- The Dow Jones Industrial Average. State Street, which runs the SPDR Dow Jones Industrial Average ETF, describes the index as “composed of 30 ‘blue-chip’ U.S. stocks” and as “a price-weighted index”, with members chosen by an Averages Committee. Price-weighted means a stock with a higher share price weighs more, whatever the size of the company.
- The S&P 500. The same firm’s S&P 500 ETF page says the index “is designed to measure the performance of the large-cap segment of the US equity market” and is “float-adjusted market capitalization weighted”: the bigger the company’s tradable value, the bigger its weight. The index had 503 stocks on October 29, 2026, according to the fund page.
Price weighting against market-value weighting
The two weighting rules can rank the same companies in opposite order. A company with a high share price but a modest market value counts for a lot in the Dow and little in the S&P 500; a giant with a low share price is the reverse. That is one reason the two indexes can diverge for years even though they hold many of the same names.
A stock does not earn blue chip status by joining an index: it is a description used by investors, and a company can be called a blue chip without being in the Dow. What the Dow offers is a fixed, published list of 30, which makes a measured comparison possible.
Blue chips vs. the S&P 500: the numbers
We compared the SPDR Dow Jones Industrial Average ETF (DIA) with the SPDR S&P 500 ETF (SPY) over every trading day they share, from January 20, 1998 to October 28, 2026, 7,239 sessions. Prices are adjusted for dividends, so the returns include reinvested dividends and are net of each fund’s fees.
| Jan 20, 1998 to Oct 28, 2026 | Dow 30 ETF (DIA) | S&P 500 ETF (SPY) |
|---|---|---|
| Yearly return with dividends | 9.05% | 9.30% |
| Growth of $1 | $12.11 | $12.93 |
| Annualized volatility of daily returns | 18.5% | 19.3% |
| Worst fall from a peak (low of March 9, 2009) | −51.9% | −55.2% |
| Calendar years ahead, 1999 to 2025 | 12 of 27 | 15 of 27 |
| Rolling 10-year periods ahead | 56.3% | 43.7% |
| Gross expense ratio, October 2026 | 0.16% | 0.0945% |
Over 28 years the two ended close: $12.11 against $12.93 for each dollar invested. The blue chips moved slightly less from day to day and fell slightly less in 2008 and 2009. The chart below draws the same comparison from monthly closes, so its end values differ a little from the daily figures in the table.
Dow 30 ETF against S&P 500 ETF, growth of $1 since 1998
- Dow 30 ETF: $10.80, worst fall −47.0% (solid line)
- S&P 500 ETF: $11.88, worst fall −50.8% (solid line, second color)
Which one led, and when
| Period | Dow 30 ETF | S&P 500 ETF |
|---|---|---|
| Jan 1998 to Dec 2009, yearly return | 4.46% | 2.79% |
| Dec 31, 2009 to Oct 28, 2026, yearly return | 12.44% | 14.18% |
| Last 10 years, to Oct 28, 2026 | 13.36% | 15.58% |
| Last 5 years, to Oct 28, 2026 | 9.87% | 12.50% |
| Fall within 2000 to 2002 | −35.0% | −47.5% |
| Fall within Oct 2007 to Mar 2009 | −51.9% | −55.2% |
| Fall within Feb to Apr 2020 | −36.7% | −33.7% |
| Fall within 2022 | −20.8% | −24.5% |
The blue chips fell less in 2000 to 2002 and in 2022, and trailed in most years after 2010. In 2020 the Dow fell more. The S&P 500 led in six of the seven full calendar years from 2019 to 2025, all but 2022. None of this says which will lead next; it shows that the gap depends on the period you pick.
Individual blue chips vs. an S&P 500 index fund
Buying a handful of blue chip stocks is not the same as buying a blue chip index. An index changes its members over time, through its committee; a portfolio of five names keeps them unless you sell. A few large U.S. companies, chosen to show the range from a full recovery to a near wipeout, with dividends included and spin-offs counted as reinvested in the parent share:
| Stock | Worst fall from a peak, with dividends | Peak back by Oct 28, 2026? |
|---|---|---|
| General Electric | −85.5%, Aug 2000 to Mar 2009 | Yes, in April 2024 |
| Citigroup | −98.0%, Dec 2006 to Mar 2009 | No |
| AIG | −99.6%, Dec 2000 to Mar 2009 | No |
| Microsoft | −69.4%, Dec 1999 to Mar 2009 | Yes, in July 2014 |
| S&P 500 ETF, for comparison | −55.2%, Oct 2007 to Mar 2009 | Yes, in August 2012 |
Worst fall from a peak, with dividends
A single company can fall further than the index and never come back; an index fund falls that far only when most of its companies fall together. That is the case for diversification, and the reason to own individual blue chips is a different one: control over what you own, no fund fee, and the dividends paid directly. For a related comparison, see blue chip stocks vs. growth stocks.
Blue chip stocks vs. ETFs, index funds and mutual funds
- ETFs. An ETF trades on the exchange like a stock, during the day. DIA and SPY are themselves ETFs, so “blue chips vs. ETFs” can mean buying the Dow’s 30 stocks one by one, or buying them in one fund at a fee of 0.16% a year.
- Index funds. An index fund, as a mutual fund or an ETF, copies an index instead of picking stocks. It is the vehicle Warren Buffett chose in his 2013 letter to Berkshire Hathaway shareholders, where he wrote that his advice to the trustee of his wife’s inheritance was to “put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.”
- Blue chip growth funds. Funds with “blue chip growth” in their name are active mutual funds that pick large growth companies; the name does not mean they hold the Dow 30. Compare one with the S&P 500 on its own fact sheet, over the same dates, after fees.
- Active mutual funds. A manager picks the stocks and charges for it. S&P Dow Jones Indices’ SPIVA scorecard measures how they compare with their index; its U.S. year-end 2025 edition reports that in 2025 “79% of all active large-cap U.S. equity funds underperformed the S&P 500”, against 65% in 2024.
Which one fits you
| If you want | Better fit |
|---|---|
| The broadest exposure to large U.S. companies at a low fee | S&P 500 index fund or ETF |
| Thirty large, established companies, weighted by share price | Dow 30 ETF |
| To choose and hold the companies yourself | Individual blue chip stocks, with the single-company risk shown above |
| A manager trying to beat the index | Active mutual fund, knowing that 79% of them trailed it in 2025 |
At the other end of the stock market from blue chips are penny stocks; other asset classes are compared in asset classes. Dividends and their effect on share prices are explained in share price drop after a dividend.
Frequently asked questions
Are blue chip stocks better than the S&P 500?
Not over the long run measured here. From January 1998 to October 2026, the Dow 30 ETF returned 9.05% a year with dividends and the S&P 500 ETF 9.30%. The Dow 30 led until 2009 and fell less in 2000 to 2002 and 2022; the S&P 500 led after 2009.
Are blue chip stocks in the S&P 500?
Blue chip is an informal label for large, established companies, and the S&P 500 covers the large-cap segment of the U.S. market, so the companies usually called blue chips are large caps of the kind it holds. Membership of each index is decided separately by its own committee.
What did Warren Buffett recommend about the S&P 500?
His best-known instruction is in his 2013 letter to Berkshire Hathaway shareholders: Buffett wrote that his instructions for his wife’s trustee were 10% in short-term government bonds and 90% in a very low-cost S&P 500 index fund, suggesting Vanguard’s.
Is it worth buying blue chip stocks?
As a group, through a fund, blue chips have done about as well as the S&P 500 over 28 years. As individual stocks, they carry company risk: General Electric fell 85.5% from 2000 to 2009 with dividends counted, and Citigroup 98.0% from 2006 to 2009.
What is the difference between the Dow and the S&P 500?
The Dow holds 30 blue chip stocks weighted by share price; the S&P 500 holds about 500 large companies weighted by float-adjusted market value. The S&P 500 ETF charges 0.0945% a year and the Dow ETF 0.16%.
Sources
- State Street Global Advisors, SPDR Dow Jones Industrial Average ETF Trust (DIA)
- State Street Global Advisors, SPDR S&P 500 ETF Trust (SPY)
- Berkshire Hathaway, 2013 letter to shareholders
- S&P Dow Jones Indices, SPIVA U.S. Scorecard Year-End 2025 (S&P's site refuses automated readers; read in a copy of the PDF report on November 2, 2026)
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