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Consilient Observer
juin 04, 2024

Stock Market Concentration: How Much Is Too Much?

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juin 04, 2024

Stock Market Concentration: How Much Is Too Much?

Consilient Observer

Stock Market Concentration: How Much Is Too Much?

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juin 04, 2024

  • Stock market concentration has increased sharply over the past decade, creating a challenging environment for active managers and also raising unease about the loss of diversification, the valuations of the largest stocks, and the effect of flows into index funds.
  • In this report, we look at concentration over the past 75 years to see where we stand today and to reflect on what it means for active equity managers.
  • We examine which companies have had the largest stock market capitalizations and how that population has changed.
  • We ask whether there is a correct level of concentration, both by comparing the U.S. to other global markets and by presenting the possibility that concentration was too low in the past.
  • We then seek to determine whether fundamental corporate performance supports the current increase in concentration.
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Market Capitalization is the total dollar market value of all of a company's outstanding shares.

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