ETFs - Diversifying away from AI

[Greenmantle]

Just watched this from Morning Star

https://www.morningstar.com/funds/3-etfs-diversify...

The stand out point for me is:

Over 22% of the value of the global public companies sits with 10 companies, all of which are in the high-stakes chase for either the best AI model, the best chips for AI models to run on, or the best way to get AI technology into people’s hands.

In addition all the major AI players having been issuing corporate bonds (Alphabet 100 year GBP springs to mind) as well as saying capital expenditure in 2026 will be significantly higher than 2025 revenues. (Amazon, Alphabet, Oracle)

In my mind 22% is too large a piece of the pie even when thinking Globally.
Is anyone thinking of diluting their Global ETFs (ishare MSCI, Vanguard FTSE etc) to reduce exposure to these 10 companies?

[locoloco]

i guess depends whether one believes that there's still runway for any/all of the companies involved. Personally, i'm not a huge fan of the hyperscalers for growth this year - but i do think that there's a fair few Co's in the sector that should do well for the foreseeable - chips, memory/ssd/flash, optical etc, some of which (nvda included) have fairly low PE's;
If that sector implodes, it'll have wider repurcussions - for now, don't see why the momentum will shift/slow (aside from open ai which could be a cancer)

So my bets are still with individual stocks, albeit not the likes of goog/amzn/meta etc

but for a bit of safety, planning on rotating into 2-3 etf's: industrials, materials, energy.

[superpp]

I've recently reduced my exposure to US stocks (which are very Mag7 heavy), by bringing my Global ETF (FWRG) from 90% of my holdings to 60% and replaced the 30% with a Global tracker which excludes the US (XMWX).

[Puzzles]

I had around 30% in UK as it felt under valued and it’s done pretty well over the last year.

Not sure where to go from here though.

[targarama]

Agree it is good to diversify, but don't forget where the profits are being made already at high margins.

My 'outside the pension' investments have been focused on who is making the shovels in the AI gold rush. The cash is being splashed and it is going somewhere. Whoever wins the AI race they are all building out using something (memory, networking, TPUs, GPUs, data center components, power technology/supply). e.g. TSMC, AVGO, NVDA, MU, OTCPK (Korea).