If that's the case it could be especially good for small-cap "because traditionally, when the economy is on stable footing, small and mid-cap stocks outperform large and
mega-cap stocks.
For example, Table 3 shows that the S&P 500 Equal Weight Index has the highest allocation to mid-cap stocks and the lowest allocation to
mega-cap stocks.
US
Mega-Cap Stocks and International Equities Warrant a Closer Look
While that fund benefited from an overweighting last year in some
mega-cap stocks such as Microsoft Corp.
And I think investors will get tired of
mega-cap stocks, like Intel and Microsoft, once the diminishing returns take over.
There is growing evidence that the concentration of performance among the
mega-cap stocks has started to wane," says Lehman Brothers' report
Potential strategy: Overweight high-dividend
mega-cap stocks, smaller developed markets, emerging market equities, and corporate bonds
For investors this may mean favoring the
mega-cap stocks over smaller competitors, since current leaders may not be displaced as quickly or have their market position challenged as aggressively, which may push their valuations higher as they sustain better relative profit growth," he said.
From a capitalization perspective,
mega-cap stocks have narrowly underperformed smaller caps, and we would advise investors to stick with a mega cap bias.
SEATTLE -- Russell Investments has launched new indexes to reflect the style classifications of
mega-cap stocks in emerging markets.
The investment bank especially favors
mega-cap stocks in the S&P 100 over the broader large-cap S&P 500 index.
There has been some chatter that
mega-cap stocks should deliver the strongest performance this year, but the earnings numbers do not support this prediction.
