This lends strength to the notion that flows into large-cap stocks are informing market trajectories more than the rest of the market itself. Also, given that government debt exposure remains a niche interest, this flow is also driven by limited access to viable alternatives. In other words, a significant portion of these flows follow a form of self-preservation which becomes a self-fulfilling prophecy: as their valuations fall, smaller companies will find it increasingly harder to secure financing and challenge the status quo. One means of growth would be to collaborate/enjoin with the top-of-the-line which further biases survivability.

All in all, size matters and it’s important to be wary of fuzzy growth narratives. Markets continuing to be in churn provide an ideal opportunity to make tactical trades, which Exchange-Traded Products (ETPs) are well-equipped to provide at low costs and with no margin requirements. Leverage Shares offers a wide variety of products that give the sophisticated investor enhanced exposure on both the upside and the downside. Click here to explore and learn more.