Goldman Sachs Asset Management is skimming off some of its profits from high-flying technology shares and putting the money into cheaper companies.
The firm believes tech shares will come under pressure and prefers areas like energy and Japanese shares, according to Alexandra Wilson-Elizondo, co-chief investment officer of multi-asset solutions.
In her view, the U.S. economy is on track for a soft landing, but there are plenty of risks that could change the trajectory. "We like taking profits on technology and moving toward other sectors," she said in a phone interview.
In the tech industry, "the risk-reward profile is skewed to the downside," she added. "While we still believe in being long equities and having them in the portfolio, we think that there are some more attractive opportunities to access."
Returns among the Magnificent 7 stocks have already started to diverge. While Nvidia Corp. has soared 72% this year, others haven't fared as well.
Apple Inc. shares have struggled due to weak demand for iPhones in China, and Tesla Inc. is down 30% year-to-date on concerns over electric vehicle demand.
