OEF: The Cycle For The Biggest Of The Big Is Likely Over

seekingalpha05-08

Daniel Grizelj Big has been beautiful. But only for so long. I'm on a relative basis bearish on mega-cap leadership, and expect significant mean reversion to take place against mid and small-cap ...

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I'm on a relative basis bearish on mega-cap leadership, and expect significant mean reversion to take place against mid and small-cap ...</p>\n\n<a href=\"https://seekingalpha.com/article/4690263-oef-the-cycle-for-the-biggest-of-the-big-is-likely-over\">Source Link</a>\n\n</div>\n","source":"seekingalpha_fund","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>OEF: The Cycle For The Biggest Of The Big Is Likely Over</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nOEF: The Cycle For The Biggest Of The Big Is Likely Over\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-08 03:03 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4690263-oef-the-cycle-for-the-biggest-of-the-big-is-likely-over><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Daniel Grizelj Big has been beautiful. But only for so long. I'm on a relative basis bearish on mega-cap leadership, and expect significant mean reversion to take place against mid and small-cap ...</p>\n\n<a href=\"https://seekingalpha.com/article/4690263-oef-the-cycle-for-the-biggest-of-the-big-is-likely-over\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SPY.AU","symbol_name":"SPDR® S&P 500® ETF Trust","start_time":0,"source_url":"https://seekingalpha.com/article/4690263-oef-the-cycle-for-the-biggest-of-the-big-is-likely-over","article_id":"2433673104","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1468442514/image_1468442514.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2433673104","pubTimestamp":1715108614,"sourceInfo":{"source_id":"seekingalpha_fund","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"No surprise - OEF has outperformed. I will say the price ratio of OEF to SPY looks tired here. This furthers my own belief that we are near the end of the era for large-cap momentum outperformance. StockCharts.com Pros and Cons On the positive side, OEF offers investors a good opportunity to gain exposure to some of the most influential and financially robust corporations in the United States. These companies have demonstrated their ability to weather economic storms, adapt to changing market conditions, and consistently deliver shareholder value. By investing in OEF, investors can potentially benefit from the collective growth and innovation of these industry titans, capitalizing on their dominant market positions and global reach. 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I'm on a relative basis bearish on mega-cap leadership, and expect significant mean reversion to take place against mid and small-cap stocks. The question, of course, is when. I could be right, but not for another year. If that's the case, and there's still leadership persistence in large-caps, then the iShares S&P 100 ETF (NYSEARCA:OEF) is worth considering for a trade. This fund aims to mirror the performance of the S&P 100 Index, a benchmark that includes 100 of the largest publicly traded companies in the US. The fund has gotten significant interest, with over $11 billion in assets under management, all for a low expense ratio of just 0.20%, Holdings - All The Hits Because this is just about the top 100 largest stocks, the top holdings shouldn't be a surprise. These are primarily all the headline tech names you've come to grow and love for how much they are mentioned in traditional media (sarcasm, of course). ishares.com This is both a blessing and a curse in my view. Yes, it clearly has worked, but at the same time, it may not work going forward as these are the very companies that likely are most vulnerable to aggressive weakness in a stock market correction. Sector Breakdown: Hope You Love Tech As to sectors, no surprises here that Tech makes up the largest allocation at nearly 36%. The allocations here are worth considering from a risk/reward perspective. If nervous about Tech, then you probably don't want large caps in general, given how outsized the sector's weighting is relative to other parts of the market at this point in the cycle. ishares.com Benchmarking Against Peers: How Does OEF Measure Up? The fund to most easily compare OEF to is the SPDR® S&P 500 ETF Trust (SPY), a fund that tracks the broader S&P 500 Index (SP500). While SPY offers a more comprehensive exposure to the U.S. equity market, its holdings include a broader range of companies, including those with smaller market capitalizations. In contrast, OEF's laser focus on the largest and most established corporations provides investors with a concentrated play on the nation's economic powerhouses. So how has it done? No surprise - OEF has outperformed. I will say the price ratio of OEF to SPY looks tired here. This furthers my own belief that we are near the end of the era for large-cap momentum outperformance. StockCharts.com Pros and Cons On the positive side, OEF offers investors a good opportunity to gain exposure to some of the most influential and financially robust corporations in the United States. These companies have demonstrated their ability to weather economic storms, adapt to changing market conditions, and consistently deliver shareholder value. By investing in OEF, investors can potentially benefit from the collective growth and innovation of these industry titans, capitalizing on their dominant market positions and global reach. However, it's crucial to recognize that OEF's concentrated approach also carries inherent risks. By focusing exclusively on mega-cap companies, the fund may miss out on the potential upside offered by smaller, more nimble players that could emerge as disruptors in their respective industries. Additionally, OEF's performance is intrinsically tied to the fortunes of the largest corporations, which can be susceptible to regulatory scrutiny, geopolitical tensions, and shifts in consumer preferences. Furthermore, investors should be mindful of the potential for higher volatility associated with OEF's concentrated portfolio. While this volatility can translate into outsized returns during periods of market upswings, it can also amplify losses during downturns. Conclusion: The Moment Has Pass  The iShares S&P 100 ETF has been a big winner since 2023, but I think the cycle going forward won't favor the biggest of the big. It's certainly a good fund if you disagree, but because of just how much mega-caps have outperformed, this to me is one to avoid allocating to until after a sizeable correction has taken place. I think there's far more opportunity in mid-caps and small-caps here for the long term. And I worry that investors underappreciate how hard Technology could pull back, and bring with it funds like this.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2433673104"}