In this paper, Alexis Flageollet and Juan Sebastian Caicedo demonstrate that the level of concentration on the MSCI USA index reduces the possibility of generating outperformance, causing a scarcity of diversification and stock-picking possibilities. MSCI USA Mega caps have largely been favored in 2020 - more so than in 1999, at the peak of the dotcom bubble, according to their metrics.

Discover the unique analysis of Seeyond experts.

Highlights

  • A pool of 600 stocks to pick from… really?
  • Mega-cap stocks eating up mid-and-small caps
  • Opportunities for stock picking drying up
  • Towards the end of diversification?
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