Unlocking ETFs That Beat the Market Without Nvidia: A Deep Dive
Ever wondered about ETFs that outperform the broader market without exposure to Nvidia? Bloomberg Intelligence’s Athanasios Psarofagis delved into this intriguing realm of investment options. Let’s explore the types of funds that achieve this feat and the thematic elements that set them apart.
Exploring Three Categories of Outperforming ETFs
- The Crypto Sector:
- The best performing sector with minimal Nvidia exposure
- Random Country ETFs:
- Countries like Japan and India have shown strong performance
- US-centric ETFs:
- Homebuilders and reshoring companies in the US have excelled without Nvidia exposure
While outperforming the market without Nvidia exposure is challenging, there are certain names and sectors that have managed to achieve this feat. It’s a tough task in the current market environment, but not impossible.
Historical Comparison of Market Concentration
Comparatively, the current market has a high concentration in tech, with the top ten companies dominating returns. Tech ETFs and tech stocks play a significant role in today’s market landscape, making it difficult to perform without exposure to this sector.
However, historical trends show that ETFs were not as prominent in the past during market concentration phases. Smart beta strategies, which deviate from traditional market cap weightings, offer potential solutions to combat market concentration issues.
Strategies for Holding Less Tech Weight in ETFs
- Avoid Tech Sector ETFs:
- Investing in sectors that steer clear of tech can reduce exposure
- Equal Weight ETFs:
- Distributing investments evenly across sectors can dilute tech’s influence
- Smart Beta Factors:
- Factors like value and quality can help in underweighting tech compared to market cap weighted ETFs
Hot Take: Crafting a Diverse ETF Portfolio in Tech-Dominated Markets
As you navigate the world of ETF investments in a tech-dominated market, consider exploring alternative sectors and smart beta strategies to diversify your portfolio effectively. Understanding the nuances of various ETF categories and thematic trends can help you build a robust investment strategy tailored to your unique financial goals and risk tolerance.
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