Tampa, Florida, October 8, 2026 / PRNewswire / -- A latest report released by DoubleLine suggests that in the current context of highly concentrated markets, investors can opt for valuation-based strategies and equal-weighting strategies as a complement to their exposure to the S&P 500 index. The report indicates that nearly 40% of the market value of the S&P 500 index comes from the information technology sector, and the top ten largest companies by market value account for more than 40% of the total as well.
This report, titled "Diversifying U.S. Stock Exposures in a Centralized Market," was authored by Portfolio Manager DoubleLine Eric Dhall and Asset Allocation Strategist Ryan Kimmel.
The two authors write, “Market concentration in itself does not necessarily indicate an impending correction.” They also acknowledge that many market leaders have strong fundamentals. However, they suggest that investors should still consider adopting complementary investment strategies to reduce the risk of continuing to bet on a few companies and single sectors outperforming. Past winners are not necessarily future winners, especially when these winners have significant valuations that are premium.
Dhall and Kimmel suggest that investors may consider two stock investment strategies, which can be used alone or in combination; both of these strategies differ from passive replication based on market capitalization-weighted indices such as the S&P 500.
One of the stock investment strategies provided by DoubleLine tracks the Shiller Barclays CAPE ® U.S. Industry Total Return Index ( CAPE ®). CAPE ® systematically allocates funds to sectors that are relatively undervalued and have positive momentum, and reallocates and/or rebalances on a monthly basis.
Different from the valuation method based on sector levels (CAPE ®), DoubleLine also offers another strategy that tracks the top 500 companies in Barclays Fortune and Equal Weighted Total Return Index (top 500 in Barclays Fortune). Barclays Fortune screens individual stocks at the company level and makes equal-weight allocations to companies within the Fortune 500 list; this stock selection is based on revenue, rather than market capitalization.
DoubleLine's Dhall and Kimmel wrote: 'Strategies based on CAPE ®, Barclays Fortune 500, or a combination of both, are not substitutes for market capitalization-weighted exposures, but rather strategic supplements.' They stated that CAPE ® diversifies valuation risks; Barclays Fortune 500 diversifies the risk associated with concentration in a single company.'
Terminology and Definitions
Market Capitalization ( Market Capitalization , market , cap ) – The total market value of a company's outstanding shares calculated in US dollars, commonly referred to as "market capitalization." It is calculated by multiplying the total number of a company's outstanding shares by the current price per share.
About DoubleLine
DoubleLine Capital is an investment advisory firm registered under the Investment Advisors Act of 1940. DoubleLine Capital and its affiliated entities (collectively referred to as “DoubleLine”) manage assets totaling approximately $97 billion, including open-end mutual funds, collective investment trusts, closed-end funds, exchange-traded funds, hedge funds, variable annuities, UCITS, and separate accounts. The contact phone number for DoubleLine is (813) 791-7333, and their email address is [email protected]. The media can contact DoubleLine through [email protected]. DoubleLine ® is a registered trademark of DoubleLine Capital LP.
Message source: DoubleLine
