David Stevenson, founder and strategic adviser at ETF Stream, has assessed opportunities and challenges in 2024, ranging from the fixed income revival to active manager underperformance and the ‘acute’ need to diversify amid US large cap dominance.
He said the emphasis on the word diversification is “becoming ever more acute”, with the US comprising 70.1% of the MSCI World and the ‘magnificent seven’ alone claiming a 19.2% stake of the global benchmark which captures over 1500 equities.
Stevenson noted US large cap tech, consumer and communications names have done “terribly well” and he “would not want to bet against them”; however, he urged investors to consider other factors, themes, sizes and risk factors.
“We have had an amazing run of outperformance by US large cap equities but logic just simply suggests mean reversion,” he continued. “At some point, they…
