Extreme concentration

The MSCI World Index, which comprises more than 1,400 companies across the globe, serves as the standard benchmark for most global equity funds and is the yardstick against which fund managers are measured. Last year, over 90% of the index’s gains were driven by U.S. stocks, implying that any manager who shunned American equities ran a significant risk of underperformance—and potentially losing their job. According to today’s chart by Andrew Lapthorne at Société Générale, excluding NVIDIA or the index’s top 10 components would have led to a noticeable drop in relative performance and quite possibly spoiled many fund managers’ holiday celebrations. While avoiding U.S. equities and leading technology names entirely is nearly impossible, the extreme concentration in just a handful of stocks is unprecedented and is likely to revert to the mean at some point. However, the timing of this reversion remains uncertain—especially given that NVIDIA’s stock price has already risen by 11% in 2025.