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Toroso Market Commentary for 4th Quarter, 2019

Posted by David Dziekanski on Feb 3, 2020 4:42:00 PM
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The Acronym Soup Decade of US Large Cap Growth-ish Tech-ish Stocks

US markets have experienced one of the greatest periods of performance relative to most broad asset classes over the last decade.  Growth names that mostly reside in the top 100 US stocks (as they’ve rode the momentum train all the way up the market cap list over the last 10 years) continue to push higher in a market that feels expensive but by traditional ratios is just slightly above normal levels.  What are we missing?  We are missing any real sense of expected growth over the next 3 to 5 years.  More on that to come.

There are 4, trillion-dollar, publicly listed US companies. Just how much of the global equity rally are Microsoft, Apple, Alphabet (Google) and Amazon, also known as MAGA, responsible for? In terms of contribution to return, between March 31st 2009 and Dec 31st 2019, MAGA was responsible for 1/8th (12.4%) of the entire US market rally measured by iShares S&P Total Market ETF (ITOT).  MAGA also contributed nearly (13.64%) to the S&P 500 measured by SPDR S&P 500 ETF Trust (SPY) and more than 1/12th of global equities rally compared to iShares TR/MSCI ACWI ETF (ACWI) (more to come).  We’ll focus on the US total market comparison, which holds approximately 1500 companies in addition to owning over 5000 individual tickers since March 2009.  Very few of them mattered except for the ones that now reside at or near the top of the index.  Below you will find a contribution to return chart.  We will refer to these as CTR.

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