NEPC’s Chief Investment Officer, Tim McCusker, is featured in this Pensions & Investments article discussing how AI-driven market concentration is shaping today’s investment landscape and influencing portfolio construction. Visit Pensions & Investments to read the full piece.
The boom around artificial intelligence has created persistent concentration at the top end of the U.S. stock market, leading to a multistep problem for investment consultants helping their clients navigate both a fast-evolving technology and a unique investment environment.
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The potential risks and rewards of AI stretch beyond just the performance of the Big Tech stocks, said Tim McCusker, partner and CIO at NEPC.
“I’m sort of thinking about it the way you have to think about technology now. There is a sector called technology, but technology is in every single asset class and every single sector. And I think you have to start thinking about artificial intelligence in the same way,” McCusker said.
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“Hedge funds seem to be back on the menu in a way that they haven’t been for most of the last few years,” NEPC’s McCusker said.
Meketa and NEPC are among the 10 largest consulting firms worldwide, according to P&I’s latest survey… NEPC reported $1.7 trillion, up more than 4% from 2024.
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However, McCusker said that clients looking to add geographic diversity to their stock exposures shouldn’t be too concerned that one good year has made international equities too expensive. He said relative weakness of the S&P 500 is explained more by a drop in the U.S. dollar than an underlying shift in the global economy.
“International has been a good place to be this year, but when you look through it, it’s really about the dollar more than anything else. … So it still seems like a reasonable time and a reasonable entry point to buy non-U.S. exposure,” McCusker said.
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