How has investing in the US changed over the last decade?

Staci West 21/06/2023 in Equities, US

Hugh Grieves, co-manager of the Premier Miton US Opportunities fund has been investing in the US market for over a decade – so we asked him, “what’s changed?”

I think the biggest difference that’s really emerged over the last 10 years is [that] 10 years ago, the S&P 500 really used to represent the US economy, and it was a broad range of companies that operated in the US. And now, with the growth of the FAANGs and the valuations that you see in the technology sector, you know, those group of companies now represent almost 40% of the S&P 500. I mean, [that’s] if you include Amazon as a tech company, Google as a tech company, and all of these. So, the S&P 500, as an index, is not the S&P 500 that it was 10 years ago. It is very much skewed towards higher growth, higher valuation companies, which are trying to change the world, and you get much less exposure towards more general purpose, average US companies. So, I think that’s one thing that investors very much need to be aware of that’s changed over the last 10 years.

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