Giants Warped

• AI chip giants TSMC, Samsung, and SK Hynix now comprise one-third of the MSCI Asia-ex-Japan index, creating significant concentration risks for investors. • This dominance has warped stock picking, forcing fund managers like Sam Konrad to sell their best-performing assets to prevent portfolios from becoming too top-heavy. • HSBC reports that TSMC is currently the most significant portfolio underweight among global emerging-market and Asian funds.

• AI-driven rallies in Taiwan and South Korea have significantly boosted the performance of regional stock portfolios, creating a "top-heavy" concentration of winners. • Fund managers, such as Sam Konrad, are now facing the paradox of needing to sell their best-performing AI chip stocks to manage risk and maintain diversification. • This trend highlights how a small group of AI chip giants has disproportionately influenced Asian stock picking, warping traditional investment strategies.