Barclays_Global_Portfolio_Manager_s_Digest_Highly_Concentrated

CrossAssetResearch5May2024GlobalPortfolioManager'sDigestFOCUSHighlyConcentratedEquityProductManagementGroupTerenceMaloneWeprovidecontextandperspectiveonresearchacrossregions+12125267578andassetclasses,thisweekhighlighting:ouranalysisaroundterence.malone@barclays.comhowtonavigatetheconcentratedequitylandscapeintheUS;aBCI,USlookatproposedregulationsgoverningUSoutboundinvestmentinChina;andouroutlookfortheBoJandmonetaryRobBatepolicyinJapan.+44(0)2077733576rob.bate@barclays.com•NavigatingaConcentratedUSEquityMarket:Inter-sectorandpairwisestockcorrelationsBarclays,UKremainathistoriclows,suggestingitisfertilegroundforactivemanagement.Meanwhile,FICCProductManagementGroupmarketreturns,earningsupside,andinstitutionalinvestorexposureremainhighlyBenMcLannahanconcentratedinBigTech;evenearningsrevisiontrendsshowasignificantbifurcation+44(0)2031349586favoringBigTech.WerecentlyhighlightedareasoffundamentalstrengthunderpinningBigben.mclannahan@barclays.comTech’soutperformanceandtheirrelativescarcityelsewhereintheU.S.equitymarket.ToBarclays,UK"broaden"sourcesofreturns,wethinkthatseekingelementsofthefundamentalcharacteristicsofBigTechwithintherestofSPX(andbeyond)canbeagoodstartingpointtoJenniferCardillidealwithaconcentratedmarket.Withthisinmind,weprovideanoptimizedbasketof50+12125268351stocksoutsideofBigTechtodiversifysources...