The S&P 500 Is Only 50 Stocks. 70% of the Index Is in a Correction. Did the Sell-Off Already Happen?

Paisley Nardini of Tema ETFs explores AI investing, S&P 500 concentration, and how to build a portfolio around changing market risks. How can investors participate in powerful growth trends without making every holding a bet on the same outcome?

In this episode of Excess Returns, Paisley joins Jack Forehand and Justin Carbonneau to discuss the risks beneath a resilient stock market, why tomorrow’s AI winners may differ from today’s leaders, and where she sees opportunities in power and infrastructure. They also explore private-company exposure inside ETFs, the role of thematic funds alongside a passive core, and why knowing what you own matters more than the number of holdings in your portfolio.

Topics covered:

• What weak market breadth reveals beneath the headline indexes
• Interest rates, midterm elections, and the limits of historical market patterns
• Prediction markets as a source of information for investors
• AI earnings expectations, debt financing, and the risk of slowing growth
• Why bonds can provide income without reliably offsetting equity risk
• Small-cap profitability and the importance of quality screens
• AI bottlenecks, photonics, power demand, and infrastructure investment
• Private-company exposure in ETFs: liquidity, fees, and investment rationale
• Using thematic strategies as satellite positions around a passive core
• Portfolio concentration, investment humility, and staying flexible

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Timestamps:

00:00 Introduction and the risks beneath the market
04:37 Higher rates and the midterm election outlook
09:17 What investors can learn from prediction markets
13:36 AI growth expectations and changing market leadership
19:50 Portfolio risk, bonds, and faster market drawdowns
26:09 The AI bubble debate and small-cap quality
33:45 Who benefits from AI beyond the hyperscalers?
39:29 Energy infrastructure and putting AI to work
45:54 Private-company exposure inside ETFs
52:01 Where thematic investing fits in a portfolio
58:32 Commodities, S&P 500 concentration, and humility

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No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.