The "Trillion" Ten

Your investment strategy needs to manage this threat . . .

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These ten mega-cap issues all have market capitalizations of $1 trillion or more and today they account for approximately 40% of the value of all US equities.  That percentage continues to grow as they incrteasingly dominate their indices.

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According to Morningstar, at the end of 2024, 53% of all US portfolios were passively managed and, of course, they were disproportionately invested in this handful of super-large companies.

 

But that's not all:  recent academic research now suggests that the "passive AUM" is really much larger than previously estimated — perhaps as much as 70%-80% of all stocks outstanding. (Chinco and Sammon:  The Passive Ownership Share is Double What You Think it Is, Journal of Financial Economics, 2024).

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The inordinate size of this overhang requies close monitoring and clear articulation of an active, defensive potfolio strategy.