European Capital Partners - Under the hood Discover this fund | European Capital Partners
Asset management and fund structuring boutique

Under the hood

Apr 12, 2024

The so-called magnificent 7 stocks ( Apple, Amazon, Google, Meta, Microsoft, NVIDIA and Tesla ) represent more than 25% of market cap of the S&P 500. Passive investors wrongly believe that by buying the index they buy a diversified basket of stocks. As we recently saw with Tesla ( stock down 30% y-t-d ) these Magnificent 7 are not The Untouchables once the tide is turning on the investment case of one of these 7 stocks. The same concentration risk goes for Europe with the so-called GRANOLAS ( Glaxo, Roche, ASML, Nestlé, Novartis, Novo, L’Oréal, LVMH, Astrazeneca, SAP and Sanofi ). These stocks represent 25% of the market cap of the main index. We believe it is prudent to look under the hood of the indices before blindly buying a tracker.

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