How tech crept into your portfolio

Few investors set out to put a large share of their money in a handful of tech companies. It happens slowly, for two reasons.

Tech share prices have risen sharply. Over the past decade, the share prices of the largest US tech companies rose sharply, which is how they came to dominate major indices. When one part of your portfolio grows faster than the rest, it takes up more of the whole. You don't have to buy more of it. It simply gets bigger on its own.

Index funds follow size. Most global tracker funds are weighted by market value. The bigger a company, the more of your money goes into it. So as tech giants grew, they took up more and more of the index.

The numbers show how far this has gone. Ten years ago, the information technology sector made up about 10% of the MSCI World index. By February 2026 it made up about 25%. The five biggest companies in the index went from 6% of its value to a record 20% by the end of 2024. The US now makes up around 70% of the whole index.

Even that figure doesn't capture everything. MSCI classifies Amazon as a consumer discretionary company and Alphabet as a communication services company, so neither counts towards the tech sector's 25%. So a fund with "World" in its name can lean heavily on a small group of US companies. You can own thousands of shares and still depend on a few of them.

How the two approaches compare in a drop

Here's a simple example. It uses made up numbers to show the idea. It doesn't reflect any real portfolio or the exact moves of recent weeks.

Imagine two investors, each with €200,000. Then imagine a bad month where tech shares fall 15%, other shares fall 5%, bonds rise 1% and cash stays flat.

The balanced investor still loses money. But the loss is less than half the size.

Bonds and cash do much of the work here. When shares fall, high quality bonds often hold steady or rise, as investors look for safety. That cushions the fall. It isn't guaranteed. In 2022, as interest rates rose, the US stock market fell about 18% and the US bond market fell about 13%. That's why spreading across several asset classes, and not just two, matters.

There's a trade off too. In the years when tech soared, the concentrated portfolio would have grown faster. Diversification gives up some of the highs in exchange for smaller lows. Whether that suits you depends on your goals and how long you plan to invest.

The part that's about you, not the market

The numbers only tell half the story. The other half is how you feel when you check your balance.

A concentrated portfolio swings harder. A 10% drop in a week feels very different from a 4% drop. Big swings cause stress, and stress leads to rushed decisions. One example is selling after a sharp fall, just to make the pain stop.

Selling locks in the loss. Then you face a second hard choice: when to buy back in. Rebounds can come quickly. On Friday 6 November, the day after the worst fall, Nasdaq futures were already climbing. Investors who sold on Thursday risked missing that bounce.

A well built portfolio won't make falls painless. But smaller swings can make it easier to stay calm and stick to a long term plan.