Search Results for: diversification

The S&P 500’s Lack of Diversification – S&P 5 vs. S&P 495 As this chart hightlights, the S&P 500 is less diversified than you think. Image: Lohman Econometrics

The Value of Diversification – 60/40 Portfolio vs. S&P 500 This chart shows the return and volatility of a 60/40 portfolio vs. S&P 500. Image: Fidelity Investments

Time, Diversification and the Volatility of Returns This chart shows how the volatility of returns decreases over time (range of equity, bond and blended total return). Picture Source: J.P. Morgan Asset Management

Market Capitalization of Five Largest Companies as Share of S&P 500 Total The five largest companies account for 29% of the S&P 500’s total market capitalization, sparking discussions about diversification. Maintaining a well-diversified portfolio is crucial for effective risk management. Image: Goldman Sachs Global Investment Research

The Five Largest Stocks in the S&P 500 The concentration of the S&P 500 in the 5 largest stocks is higher than it was 60 years ago, which is considered a potential risk, as it may result in increased market volatility and a lack of diversification. Image: Bianco Research

Equity Market Concentration – Market Capitalization of 10 Largest Companies as Share of S&P 500 Total The S&P 500’s high concentration in the top 10 stocks, surpassing dotcom bubble levels, raises concerns about diversification and market stability, as underperformance in these stocks could lead to potential risks. Image: BofA US Equity & Quant Strategy

S&P 500 – Top 10 U.S. Companies by Market Capitalization Relative to Total The dominance of the top 10 U.S. companies in the S&P 500 Index by market capitalization can raise concerns about the index’s ability to provide adequate diversification for investors. Image: Strategas Research Partners

Infrastructure Flows Infrastructure funds have seen their largest inflow since June 2022, signaling a positive trend for investors aiming for long-term returns and portfolio diversification. Image: BofA Global Investment Strategy

S&P 500 Equity Risk Premium Despite potential in U.S. equities, the decline in equity risk premium suggests caution is needed, prompting diversification across asset classes for risk management. Image: BofA Global Research

Top 10% of Stocks by Size vs. The Entire U.S. Stock Market The market cap concentration among the top 10% largest U.S. stocks raises concerns about the lack of diversification and its impact on market stability. If these stocks perform poorly, significant risks may emerge. Image: Deutsche Bank