In addition to being one of the most widely followed benchmarks in the world, the S&P 500 also serves as the basis for the world's largest ETF. Between SPY, IVV and VOO, there is more than $160 billion linked to this index in U.S.-listed ETFs, significantly more than any other benchmark .

Most investors know that the S&P 500 includes exposure to the largest U.S.-listed companies, giving the biggest weights to the most valuable companies. But that's not entirely the case; the cap-weighted methodology used by S&P makes an adjustment for the free float outstanding. In other words, it excludes shares deemed to be locked inheld by the government, restricted insiders or otherwise unable to be publicly acquiredfrom its calculation .

In many cases, that hardly puts a dent in the value of the company. But in others, it can be more significant. Below, we highlight a handful of companies that have a huge number shares locked in, resulting in a considerably smaller allocation in the S&P 500 (and therefore related ETFs) than they would otherwise command:


Rank by Market Cap

Rank In SPY

Apple 1 1
Exxon Mobil 2 2
Google 3 9
Walmart 4 22
Microsoft 5 6
Berkshire Hathaway 6 14
General Electric 7 3
IBM 8 5
Chevron 9 4
Johnson & Johnson 10 7

1. Wal-Mart Stores: With a total of 3.35 billion shares outstanding, this multi-national retail corporation founded only 50 years ago has reinvented how people shop for consumer goods. But 1.72 billion of these shares are deemed to be locked in, primarily held by members of the Walton family who routinely dominate Richest American lists (in2011 six members of the Walton family together had the same net worth as the bottom 30% of American families combined about $100 billion).

SPY does hold a whole bunch of Wal-Mart shares, but would hold considerably more if there was no float adjustment. Despite being the fourth-largest company by market cap, WMT isn't found in the top 20 of the S&P .

WMT is the top holding in several consumer-focused ETFs, including the Market Vectors Retail ETF (RTH) and Consumer Staples Select Sector SPDR (XLP).

2. Berkshire Hathaway:This conglomerate holding company is probably best known for its CEO, Warren Buffet, and his impressive track record in the investing world. Of the 1.66 million shares outstanding, only about 1.27 million are available for purchase on the market. As such, BRK also has a major reduction made when its place in the S&P 500 is determined. These 390,000 shares are primarily used by Buffett's investing groupand have helped him amass a fortune of over $44 billion by 2012, good enough to claim third place on Richest People lists.

Berkshire is one of the six biggest companies by market cap, but barely makes it into the top 15 for the S&P 500.

3. Google: With 80% of the 328.59 million shares outstanding publicly floating, the internet giant has a large number of restricted shares set aside for founders Larry Page and Sergey Brin, and other insiders. There are also a number of shares tied up in, the not-for-profit philanthropic organization that is primarily funded by the remaining locked in shares .

Google is the third-largest company by market cap, but currently occupies the #9 spot in the S&P 500.

Disclosure: No positions at time of writing.

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