Fresh Thinking On Active Investing In U.S. Large-Cap Stocks

Summary

• While U.S. large-cap stocks often hold a place at the core of portfolios, many believe this exposure is best achieved via passive index-tracking products.
• The top stock by market cap in the S&P 500 is larger than the entire small-cap universe, suggesting to us that avoiding active in U.S. large caps means sacrificing tremendous alpha potential.
• For investors seeking to increase their portfolios’ alpha potential, we find large-cap U.S. equities to be an underappreciated place to target that exposure.

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By Tony DeSpirito

When it comes to assembling a well-rounded investment portfolio, the makeup and placement of U.S. equity allocations are key considerations. Tony DeSpirito, Global CIO of BlackRock Fundamental Equities, challenges conventional thinking to suggest that alpha-seeking strategies in U.S. large-cap