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,...
Investors are pouring money into highly concentrated yet poorly understood "cap-weighted" equity indices, putting them at risk of huge losses if financial markets plummet, according to Invesco CEO Martin Flanagan. The U.S. stock market has been on a tear this year, with the Dow Jones Industrial Average up more than 1,000 points in just three months. The 10 biggest ETFs in the US have raked in around $65bn in 2017 so far, with all of those cap-weighted.