News and views on the issues impacting the world of sustainable investing, including the US Inflation Reduction Act and record global temperatures, and a focus on 'our ageing world'.
12.09.2024 | 06:05 Uhr
This rally was fueled by excitement around the Artificial
Intelligence (AI) secular theme, which in turn drove US market
concentration to unprecedented levels with the top 10% largest US stocks
accounting for around 75% of the US stock market. But the valuation moves in the Magnificent 7 has not just been
about re-rating – their economic profit has grown strongly from $40
billion in 2010 to a forecasted $460 billion in 2024, generating 26% of
the total US market economic profit, roughly equivalent to their
valuation in the market. But with momentum and positioning in technology overextended, it
didn’t take much for cracks to start to emerge by quarter end. We took
advantage of the strong momentum in technology stocks over the quarter
by taking some profit across several of our technology holdings
including two of the Mag 7, Nvidia and Microsoft, as well as global
leading semiconductor foundry, TSMC.“The Magnificent 7” refers to the seven biggest US technology related stocks1 which, except for Tesla, helped to drive markets to record highs at the end of the 2Q.
Read the full Sustainable Outcomes Global Equity update for information on the US Inflation Reduction Act, a deep dive into ‚our ageing world‘, and new positions for the SOGE strategy.
1Magnificent 7 include Apple, Microsoft, Nvidia, Alphabet (Google), Amazon, Meta (Facebook), and Tesla (as of July 2024)
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