By Lewis Krauskopf
NEW YORK (Reuters) – Nvidia Corp’s soaring rally has thrilled investors this year – except for the sizeable number of fund managers who avoided what they believe to be an expensive stock.
Shares of the semiconductor company – whose chips power generative AI apps such as ChatGPT – have more than tripled this year in a rally fueled by excitement over the prospects for artificial intelligence. Yet many funds hold less of the stock in their portfolios compared with Nvidia’s weight in key equity indexes, making it tougher for them to beat their benchmarks.
Across nearly 330 mutual funds benchmarked to the S&P 500 or a similar index, only 15% held an above-index weight in Nvidia, according to a Morningstar analysis of the funds’ most recent regulatory filings. Among those funds that held a below-average weight in Nvidia, 85% underperformed the index so far this year,…
