Extracting US alpha outside the FAANG phenomenon

The much-publicised FAANG stocks – Facebook, Amazon, Apple, Netflix and Google/Alphabet – have been the driving force behind the striking rebound for the US stock market since the depths of the coronavirus panic in March.

Apple has led the way, with its share price climbing 139% since the depths of March, making it the first company to have its market capitalisation reach USD$2trn. Facebook and Amazon have more than doubled over this period also, rising 108% and 111%, respectively. Meanwhile, Netflix and Google-parent Alphabet have also ridden the recent tech wave, with share price increases of 86% and 63%, respectively.[1] But the FAANG phenomenon is not just a 2020 story. In our view, the sizeable performance of these index heavyweights has helped propel the US stock market to gains far in excess of eve...