The boom in artificial intelligence brings the Nasdaq back to its highs and also moves into the portfolios of those who have never directly bought a technology stock. In the last session the Nasdaq Composite index gained over 2%, closing at a new record. Meta rose 11.4%, adding about $192 billion to its capitalization, while AMD gained about 10% and surpassed the $1 trillion valuation for the first time.
The movement involved the entire supply chain: Intel advanced by more than 12% and the Philadelphia Semiconductor index rose by 4.3%. The drop in oil prices and the decline in the yield on the 10-year Treasury below 5% also contributed to encouraging purchases. The record, therefore, does not arise only from enthusiasm for AI, but the latter remains the main driver of the technological sector.
For savers the question does not exclusively concern who owns Meta or AMD. These companies, together with Nvidia, Microsoft, Amazon, Alphabet and the other protagonists of the race for artificial intelligence, occupy significant positions in the indices replicated by ETFs, listed funds that follow a basket of securities.
Because the rise also comes to ETFs
The most popular indices are generally weighted by capitalisation: the more a company is worth on the stock market, the greater its weight tends to be. When shares of big tech companies run faster than the rest of the market, their influence on the index’s performance also increases.
There is also an important distinction. The record recorded on Wall Street concerns Nasdaq Composite, which includes thousands of stocks listed on the Nasdaq market. Many ETFs purchased by European investors instead replicate the Nasdaq 100, composed of the one hundred largest non-financial companies listed on Nasdaq.
According to the latest official sheet of the Nasdaq 100, updated on June 30, technology represented 68.5% of the index. The top ten components were worth around 45% overall, with AMD already at 4.11%. The percentages change with prices and rebalancing, but show how much the performance of a few companies can influence the overall result.
| Index | Concentration indicator | What does it mean |
|---|---|---|
| Nasdaq 100 | Technology at 68.5% | Strong reliance on chips, software and large platforms |
| S&P 500 | Top 10 companies at 37.8% | The largest companies determine a large part of the return |
| MSCI World | Top 10 companies at 26.6% | Even a global index retains a significant concentration |
| MSCI World | United States at 72.1% | “Global” does not mean distributed evenly across countries |
The data refers to the latest official data sheets available: June for the Nasdaq 100 and August for S&P 500 and MSCI World.
Even a global ETF is exposed to the AI boom
The name “World” may suggest a balanced distribution between the main economies. In reality, the weight of countries depends on the value of the companies present on their respective markets.
In the’MSCI World Index, updated as of August 31, the United States accounted for 72.14%, while technology accounted for 29.81%. Nvidia alone was worth 5.56%; followed by Apple with 5.07%, Microsoft with 3.90% and Amazon with 2.74%. Broadcom, Meta and Micron were also among the top ten. Overall, the ten largest stocks accounted for 26.61% of the index.
THE’The S&P 500 offers broader exposure than the Nasdaq 100 and includes companies from all major sectors of the American economy. However, it remains weighted by capitalisation: at the end of August the top ten companies were worth 37.8% of the index.
Concentration does not automatically make an ETF unsuitable. Indeed, it contributed to the returns achieved during the growth of large technology companies. It means, however, that the diversification indicated by the number of companies may be less than perceived.
The risk of duplication between different ETFs
Owning more ETFs does not necessarily equal more diversification. A fund on the MSCI World, one on the S&P 500, and one on the Nasdaq 100 can contain many of the same companies at the same time.
| Combination | Apparent diversification | Possible overlap |
|---|---|---|
| MSCI World + S&P 500 | World plus United States | Big American companies are present in both |
| S&P 500 + Nasdaq 100 | Market Use more technology | Double exposure to major megacaps |
| Nasdaq 100 + Chip ETF | More semiconductor technology | Greater weight of Nvidia, AMD, Intel and the supply chain |
| MSCI World + AI ETF | Global index plus specific theme | Technology platforms can repeat themselves |
The problem is not the presence of the same security in two instruments, but the possibility that the investor does not know the overall weight. A portfolio made up of three funds may be less diversified than one built with a single broad ETF and truly complementary instruments.
How to control portfolio concentration
Before buying an ETF, or adding one to those you already own, it’s not enough to compare returns and commissions. In the information document and in the fund sheet it is necessary to verify:
- the index actually replicated
- the weight of the top ten participations
- exposure to technology and semiconductors
- the percentage invested in the United States
- the presence of the same securities in the other ETFs
- the replication mode and the frequency of rebalancing
- any hedging against exchange rate risk.
This last point is often underestimated. Listing an ETF in euros does not automatically eliminate exposure to the dollar. If the underlying securities are US, the euro-dollar exchange rate may affect the result, unless the product uses a currency hedge.
A correct one Portfolio diversification therefore does not consist in simply increasing the number of instruments, but in combining activities, sectors and geographical areas with different behaviours.
Is the Nasdaq record an opportunity or a risk?
The rally in Meta, AMD and semiconductors reflects elevated expectations for growth in revenues, data center investments and demand for computing power. However, it does not prove that every AI company will continue to rise or that valuations are risk-free.
Concentration works in both directions: when megacaps advance, they drag the indices; when they disappoint on earnings, margins or investments, they can amplify corrections.
The point is not to get out of tech or global ETFs, but to know what’s in them. An ETF can include hundreds of companies and still depend on a few giants for a significant part of the result. The new Nasdaq record makes visible precisely this difference between numerical diversification and real diversification.
