Market Concentration at High Valuations: What to Do?
KEY TAKEAWAYS
- We find no reliable relation between US market concentration and the performance of traditional active funds.
- Systematic active solutions targeting the size, value, and profitability premiums may be more viable, especially in a global opportunity set.
- Such solutions can improve upon common alternatives that abandon market weights or provide indirect exposure to the premiums.
To address market concentration, a systematic active approach may be a compelling alternative to traditional active funds as well as indexing.
View PDF