Global equity markets remain heavily influenced by a small group of large US technology companies, but investment managers are increasingly looking beyond the sector for the next phase of opportunity.
The rise of artificial intelligence has reinforced the dominance of major technology businesses, particularly those providing chips, computing infrastructure and cloud capacity. This has helped push market concentration to unusually high levels, leaving many global portfolios with significant exposure to a relatively narrow group of companies.
Strong long-term growth prospects do not always translate into attractive entry points, particularly when valuations already reflect high expectations. As a result, some managers are widening their search for companies that could benefit from AI without being directly exposed to the most crowded areas of the market.
Healthcare is one area attracting attention. The sector has the potential to use artificial intelligence across research, diagnostics, drug development, administration and other operational areas. Infrastructure, industrials, defence, financial services and consumer businesses may also benefit as AI adoption becomes more widespread.
Portfolios that rely heavily on a small number of highly valued companies can become more sensitive to changes in earnings expectations, interest rates or investor sentiment. Spreading exposure across sectors and regions can reduce dependence on a single market theme while maintaining access to long-term structural growth.
Global Opportunities Trust plc (LON:GOT) invests globally in undervalued asset classes without reference to the composition of any stock market index.
