Popular investment strategies lose appeal with stocks in record search

Passive investing through exchange-traded funds may be losing its appeal.

Gavin Fillmore, chief revenue officer of Tidal Financial Group, has found that many of his clients are not satisfied with buying popular ETFs tied to market indexes.

“I think investors are looking beyond just what we call the ‘VOO and chill approach’ where you just buy an index in an ETF, which is a great approach but They are looking for varietyFilmore said CNBC’s “ETF Edge” This week.” “And they can’t find it in the product or in the index, so they have to look beyond that.”

Filmore referred VANGUARD S&P 500 ETF (VOO)which tracks S&P 500The performance of Both are up nearly 16% this year.

Meanwhile, Strategas Securities’ Todd Sohn says investors Loss of diversity Using the S&P 500 as a benchmark.

“Imbalance is the perfect word,” the firm’s senior ETF and technical strategist said in the same interview. he added Technology It now accounts for more than 35% of the index, a record high.

Meanwhile, with protective zones Consumer staples, Health care, Energy And utility According to FactSet, the S&P 500 is at an all-time low of 19%.

So where do traders turn? Sohan is seeing renewed interest in small cap stocks.

The Russell 2000, which tracks the group, hit an all-time high on Wednesday and just saw its best week since August. It’s now up more than 28% over the past six months – outperforming the S&P 500. Earlier this month, Russell 2000 topped 2,500 for the first time.

“I wonder if you’ll see this expansion outside of the large cap space where investors are comfortable with their technology and AI exposure and are looking for other avenues,” Sohn said.

Heavy hitters will take center stage on Wall Street next week, amid a growing chorus of supportive voices behind small caps. Then five of the seven so-called “Magnificent 7“- Meta platform, the alphabet, Microsoft, apple And Amazon — Their latest earnings report is due.