The FTSE 100 has outperformed the S&P 500 in the early part of the year, rising 5.66% compared to the S&P's 3.66%. Despite individual strong performers like Palantir in the US, their impact is limited in the overall index due to its small market share. Heavyweights like Apple and other tech companies weighing down the index have made it difficult for the S&P 500 to capitalize on gains from a few stocks. The situation raises concerns about the diversification benefits of index funds when large market-cap companies experience significant fluctuations.
Investors are surprised by the FTSE 100 outperforming the S&P 500, as UK stocks fare better despite significant gains in individual US stocks like Palantir.
While Palantir saw a 46% increase, its impact on the S&P 500 was minimal due to its small weight in the index compared to major players like Apple.
The seven largest companies in the S&P 500 represent a third of the index, creating vulnerability when they all decline together, as seen recently.
The decline of big tech stocks like Alphabet, Amazon, and Microsoft affects the S&P 500 significantly, questioning the diversification benefit of index investing.
Collection
[
|
...
]