Investors are at risk of suffering huge losses by blindly investing in highly-concentrated equity indices, according to Invesco chief executive Martin Flanagan.
According to the Financial Times, Flanagan (pictured) said relying on indices that weight stocks by market value could inflate losses if stockmarkets dip. 'Cap-weighted' indices, such as the S&P 500, direct investors' money to the largest companies and stocks with the highest valuations. The S&P 500, for example, is dominated by technology companies with Apple, Alphabet, Microsoft, Facebook and Amazon making up 11.7% of the index. Invesco considers second ETF acquisition Flanagan said investors labour under the misguided perception that these indices were "safe and cheap". The t...
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