The hype surrounding AI-related stocks could create hidden risks in investors’ portfolios, according to Matthew Benkendorf who co-manages the Vontobel US Equity Fund. His solution is for investors to have exposure to a high-quality strategy. This involves investing in businesses whose value is determined through consistent earnings compounding rather than external drivers such as AI. While AI promises to improve efficiency and capability, investors must also consider how hype affects financial markets and investor habits, Benkendorf said.
AI stocks carry hidden risks for investors, a ‘quality’ strategy can mitigate them.
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