(GME) could skyrocket more than 1,000% within days and lose just as much shortly after, bringing unprecedented volatilities to funds that own these names. TheĮxchange-traded fund (ARKK), for example, can attribute 40% of its October gains to Tesla, thanks to its 10% weight in the stock. As the stock market becomes more concentrated, a fund’s position in mega caps like Tesla and Microsoft can sometimes become the “make or break” factor for its performance-regardless of its other choices. Only 9% of large-cap growth funds beat the benchmark, the lowest rate since July 2002.ĭramatic performance of a single stock has become a significant contributor to the relative return of active funds this year. Growth managers are net underweight both stocks by 13% and 26%, respectively. Microsoft and Tesla alone contributed more than one third of the index’s return, according to Bank of America analyst Savita Subramanian. Large-cap growth funds struggled the most, as theīenchmark returned 8.7% in October, making it hard to match. Tesla alone has lifted the index by roughly 1 percentage point last month. ![]() Shares of the electric car maker returned 43.7% in October to surpass $1 trillion market cap, and now rank as the fourth-largest stock in the Part of the underperformance can be attributed to active funds’ general underweight in surging names like
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