"The S&P 500 (NYSE:SPY) has a concentration problem. Its top 10 holdings command 39% of the portfolio, with mega-cap tech names like NVIDIA ( NASDAQ:NVDA), Apple ( NASDAQ:AAPL), and Microsoft ( NASDAQ:MSFT) alone accounting for over 20%. Information Technology represents 34% of the fund, and when combined with Communication Services, Big Tech exposure pushes past 44%. For investors seeking broader diversification without abandoning U.S. equity growth, JPMorgan BetaBuilders U.S. Mid Cap Equity ETF ( NYSE:BBMC) offers a compelling alternative."
"BBMC spreads capital across more than 200 mid-cap companies with no single holding exceeding 0.73%. Its top 10 positions represent just 5% of assets, a stark contrast to SPY's 39% concentration. This structure eliminates single-stock risk while maintaining exposure to established businesses with room to grow. The sector allocation reflects a balanced approach. Industrials lead at 20%, followed by Financials at 15%, and Information Technology at just 13%. Healthcare, Consumer Discretionary, Materials, and Energy all receive meaningful representation. This diversification matters when mega-cap tech faces valuation pressure or when economic cycles favor different sectors."
The S&P 500 exhibits high concentration, with the top 10 holdings comprising 39% and mega-cap tech accounting for over 20% of the index. Information Technology is 34% of the fund and, combined with Communication Services, pushes Big Tech exposure past 44%. BBMC allocates capital across more than 200 mid-cap companies, with no single holding exceeding 0.73% and the top 10 representing about 5% of assets. Sector weights are more balanced—Industrials 20%, Financials 15%, Information Technology 13%—and other sectors receive meaningful exposure. Mid-caps offer proven business models with growth potential and lower valuation premiums. BBMC charges a 0.07% expense ratio and maintains 13% turnover for tax efficiency.
Read at 24/7 Wall St.
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