Key takeaways
- Diversification matters
The stock leaders of yesterday can quickly become tomorrow’s langards. Be prepared by diversifying across sectors and regions.
- Nuanced AI trade
The AI trade is no longer a single trade, in our view, but one where the winners and losers have differing return paths.
- Benefits of active management
An active investment approach can help ensure more diversified and resilient portfolios in all markets.
Investors have traditionally leaned on global stocks to unlock value through diversification across regions and sectors. Yet a growing risk is the degree of market concentration in a handful of US big tech and artificial intelligence (AI) giants. While being heavily exposed to these names in recent years has been profitable, we think shifting trends underscore the need for a more active approach where these areas aren’t treated as a single trade.
