Outsized positions in artificial intelligence darling Nvidia have boosted portfolio managers' returns this year but the bets stand to magnify risk if the...
NEW YORK - Outsized positions in artificial intelligence darling Nvidia have boosted portfolio managers ' returns this year but the bets stand to magnify risk if the chipmaker's red-hot shares see a reversal of fortune.
The oversized positions in Nvidia are another example of how investors have cast their lots with a handful of massive growth stocks, leading to one of the most concentrated market advances ever. Nvidia alone has accounted for around a third of the S&P 500’s nearly 17% gain this year, according to S&P Dow Jones Indices.
The stock trades at 39.3 times forward earnings, about 50% more than its industry median, according to LSEG. Anthony Zackery, a portfolio manager at Zevenbergen Capital Investments, has owned Nvidia since 2016 and continues to maintain a core position, though he has trimmed it periodically to keep within his firm’s risk-tolerance guidelines. The fund can hold as much as 13% of one stock in growth portfolios to keep in line with weightings in its benchmark, the Russell 3000 Growth Index.Some who sold out entirely, on the other hand, wish they had held on longer.
Investors are buying individual stocks at a record pace as market-beating bets dwindle to lowest ever
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