More on the five investment ideas for 2025

Article Excerpt

Here’s a more in-depth look at the ETFs we looked at on pages 11 to 14—and how they can fit into your ETF portfolio. Cutting the risk of high-flying stocks Recommended: iShares S&P 500 3% Capped Index ETF (Toronto symbol XUSC) The outstanding performance of large-cap U.S. companies over the past decade has increased the overall weight of these companies in market cap-weighted indices plus in many investor portfolios. The combined weight of the 10 largest companies in the S&P 500 index now measures 36%—almost double the average weight of the top ten over the past 30 years. In the process, the weight of technology stocks increased to a sizeable 34% of the S&P 500 index. One method to reduce the weight of the top companies in portfolios is simply to invest in an ETF that equally weights the stocks in the portfolio. While this approach has merit, it also reduces the size of the top companies to levels that do not reflect the importance of…