Markets stocks

‘Mega’ Risk

When it comes to performance, mega-cap US tech is more exception than rule. The Nasdaq 100 rebounded from its worst week since the March panic in Monday trading, but for US investors, recent dramatics served as a decidedly unwelcome reminder that while it's nice to have superfirms "on your side" (so to speak), a concentrated market can be a dangerous market. Outperformance for laggards like small-caps and value was small comfort during the September tech rout, where that just means that while an overweight in cyclicals would have shielded you from the worst losses, their relative resilience was no match for the "gravity" exerted by mega-cap growth's tumble. (And please, nobody accuse me of misogyny for the chart header -- it's an old school video game reference.) Notably, the recent correction in market leaders didn't manage to push the group outside of "acceptable" outperformance boundaries. "The relative correction in mega-cap growth has only taken them to the bottom of the range around their very strong trend of outperformance year-to-date (44%)", Deutsche Bank observes. In a note out Monday, SocGen's Andrew Lapthorne takes a moment to document the recent history of the Na
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