A Stellar Year for Market Leaders
2024 brought extraordinary gains to select assets. Rigetti (RGTI: 1,449%), Nvidia (NVDA: 171%), Bitcoin (BBR: 120%), and Gold (OUNZ: 27%) all outperformed even the exceptional Large-Cap US Equities (SPY: 23%). But these outsized returns also came with equally outsized risks. Volatility, single-day drawdowns exceeding -10%, and annualized risk greater than 50% remind investors of the price of chasing high returns.
Exhibit 1: 2024 Shining Stars Performance
Source: MarketVector, Nasdaq. Data as of December 31, 2024.
Why Diversification Matters
Investors aiming to replicate these stellar returns must weigh the risks of single-asset concentration. A diversified approach reduces exposure to idiosyncratic risk while allowing participation in broader growth trends. MarketVector offers thematic equity indexes that capture exposure to:
- MVIS® Global Digital Assets Equity Index (MVDAPP): tracks the performance of the largest and most liquid companies in the digital assets industry.
- MarketVectorTM US Listed Fabless Semiconductor Index (MVSMHX): tracks the performance of US-listed companies that specialize in the semiconductor industry and operate as fabless semiconductor companies.
- BlueStar® Machine Learning and Quantum Computing Index (BQTUM): tracks the performance of the largest and most liquid companies in the global quantum computing and machine learning industries.
- MVIS® Global Junior Gold Miners Index (MVGDXJ): tracks the performance of the most liquid small-cap companies in the global gold and silver mining industries.
Exhibit 2: 2024 Performance
Source: MarketVector, Nasdaq. Data as of December 31, 2024.
Capturing Opportunities with a Diversified Approach
2024 underscored the potential rewards of being in the right themes at the right time. However, the accompanying volatility highlights the value of diversified exposures. By leveraging broader themes, investors can participate in growth while mitigating the risks of single-asset concentration.
For more information on MarketVector Indexes, visit www.marketvector.com.
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About the Author:
Joy Yang is the Global Head of Index Product Management at MarketVectorTM Indexes. She is responsible for managing MarketVector index products and services to accelerate innovation in financial index design and adoption. Joy brings more than 25 years of investment experience to MarketVector, having led teams delivering index and quantitative-active investment solutions at Arabesque Asset Management, Dimensional Fund Advisors, Vanguard, Aberdeen Standard Investments, AXA Rosenberg, and Blackrock. Joy has an MBA from the University of Chicago Booth School of Business and a BS in Electrical Engineering from Cooper Union’s Albert Nerken School of Engineering.
For informational and advertising purposes only. The views and opinions expressed are those of the authors but not necessarily those of MarketVector Indexes GmbH. Opinions are current as of the publication date and are subject to change with market conditions. Certain statements contained herein may constitute projections, forecasts, and other forward-looking statements, that do not reflect actual results. It is not possible to invest directly in an index. Exposure to an asset class represented by an index is available through investable instruments based on that index. MarketVector Indexes GmbH does not sponsor, endorse, sell, promote, or manage any investment fund or other investment vehicle that is offered by third parties and that seeks to provide an investment return based on the performance of any index. The inclusion of a security within an index is not a recommendation by MarketVector Indexes GmbH to buy, sell, or hold such security, nor is it considered to be investment advice.