The FANG stocks (Facebook, Amazon, Netflix and Alphabet’s Google) and their peers reached record highs in March, with compound returns of almost 40% a year since the end of 2015. Then they had a setback, losing around 15% of their value.
In August last year we wrote about the FANGs’ popularity, valuation and volatility. We also included other similar US companies (Microsoft, Apple, Nvidia, Twitter and Tesla) and their emerging-market equivalents, the BATs (Baidu, Alibaba and Tencent). In our view, these technology superstars continue to be, on average, expensive, high risk and of lower quality compared with the broader equity universe.
In related consumer discretionary and technology sectors, we see better opportunities elsewhere. In developed markets, we prefer auto and technology hardware companies with steadier growth and more reasonable valuations.…
