Bank of America: The reason why U.S. active funds can't outperform the index this year is due to their under-allocation in Nvidia
Active U.S. funds have not outperformed the market this year, with underweighting Nvidia being a key factor. Despite Nvidia's popularity on Wall Street, many large investors are not overly bullish on it. Bank of America Global Research analyst Vivek Arya and his team recently conducted a quarterly review of semiconductor stock holdings in active funds. The results showed that although Nvidia is the most held semiconductor stock in active funds, with a holding rate of about 70%, its relative weight is still "low". Vivek Arya pointed out that Nvidia's relative weight is 0.99 times, far lower than the top 16 peers in the information technology and communication services industries, even when Nvidia's sales growth potential could be more than five times those companies'. Companies with higher weights than Nvidia include Meta, Salesforce, Microsoft, Alphabet. In the semiconductor industry, Applied Materials Company, KLA and Micron Technology also have higher relative weights.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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