Market leadership and concentration
When a few names carry the index.
Market leadership and concentration
| Concept | Explanation | |---|---| | Market leader | Asset, industry, or sector outperforming the broader market. | | Concentration | A small group accounts for a large portion of index return. | | Capitalization weighting | Largest assets have the greatest influence. | | Equal-weight comparison | Shows how the average constituent is performing. | | Leadership rotation | Relative strength shifts from one group to another. |
Key idea: A rising index is more robust when participation broadens, but narrow leadership can persist for a long time.