AI Trade Returns as Mega-Cap Concentration Draws Attention
Nasdaq-100 ETFs have gained more than 175% since the October 2022 market bottom, while equal-weight exposure has attracted renewed interest.
Key takeaways
- The Magnificent Seven’s combined market capitalization topped $25 trillion during Tuesday’s trading session.
- The Invesco S&P 500 Equal Weight ETF recently reached $100 billion in assets under management.
The AI trade has picked up again, with the Magnificent Seven’s combined market capitalization topping $25 trillion during a recent Tuesday session, according to Zacks’ Neena Mishra. Nvidia is on track to become the first company to reach a $6 trillion valuation, the article said.
The Invesco QQQ ETF and QQQM have returned more than 175% since bottoming in October 2022. NVIDIA, Apple, Microsoft and Micron make up more than 26% of the portfolios of BlackRock and State Street ETFs tracking the Nasdaq-100.
Interest in equal-weight strategies remains strong. The Invesco S&P 500 Equal Weight ETF recently reached $100 billion in assets under management, as the article pointed to concentration in the broader index: its top 10 holdings account for about 40%.
Momentum and high beta were the strongest U.S. equity factors this year, while low volatility, dividend yield and size lagged. Christopher Dahlin, Invesco’s senior factor and core equity strategist, joined the podcast to discuss factor investing and the AI trade.
This article was produced with the help of AI technology. Source: Yahoo Finance
