Investors look for shelter from AI concentration risk (opens the source in a new tab)
- More than two-thirds of the Russell 1000 is linked to AI, per Citigroup research, and Big Tech Hyperscaler The giant cloud companies (Amazon, Microsoft, Google, Meta, Oracle) that build the biggest data centres. and AI beneficiaries are about 16% of the US high-grade bond market, its biggest group.
- Fund managers at Amundi, BlackRock and Franklin Templeton say clients want returns that don’t move with AI: global macro and long-short hedge funds, systematic strategies, mining and renewables.
- Amundi’s Vincent Mortier says clients are looking more at emerging markets, including local stocks and bonds in India, China and Latin America; a turn in AI is ‘not imminent’, he says, ‘but I think it will come’.
- 2/3+
- large US firms tied to AI
- ~$1tn
- AI build-out by a few firms
Why it matters When one theme dominates both US stocks and bonds, spreading risk gets hard.
Other side The same managers say no sell-off is imminent, and the right hedge funds are hard to find and often closed. Prudence, or trying to time the market?