The economic environment of recent years bears little resemblance to that of a few decades ago. Investing in companies through portfolio management now requires a deeper understanding of the investment universe and its evolution.
Concentration of Value
"In recent years, we've observed significant geographical concentration within global markets," notes Nikola Krstic, Chief Investment Officer at Midas Wealth Management, a subsidiary of the Swiss institution Dreyfus Sons & Co Ltd, Banquiers. "Today, the United States alone accounts for over 60% of global indices. More strikingly, nearly half of the S&P 500's market value—the index representing the 500 largest U.S. companies—is concentrated within just twenty firms. Companies such as Apple and Nvidia now boast market capitalizations surpassing the entire CAC40."
According to the CIO, this concentration trend requires adapting investment strategies. Exposure to global indices increasingly implies concentrated investments in highly complex industry leaders. To succeed, one must develop a thorough understanding of the companies driving sectoral growth.
"For 2025, U.S. earnings per share are projected to rise by 13%, predominantly driven by the technology and healthcare sectors," adds Nikola Krstic. "These sectors distinguish themselves through innovation and strong competitive advantages. However, despite their robust fundamentals reinforcing market dominance, their operational intricacies present substantial analytical challenges."
Effective investing now demands far deeper analysis
More Complex Business Models
Thirty years ago, the leading S&P 500 companies included Exxon Mobil, Coca-Cola, McDonald’s, PepsiCo, and Walmart—companies with relatively straightforward business models focused primarily on product sales, margin management, and physical retail expansion.
“Since then, the economic landscape has radically changed. Today’s dominant players operate with far more complex and technical business models. To invest wisely, it is essential to understand these models and analyze the full range of value-creation levers that drive their development. This requires deep domain-specific expertise,” continues the Chief Investment Officer of Midas Wealth Management.
Looking Beyond the Obvious
This transformation extends beyond technology and healthcare. The automotive industry has been reshaped by disruptive newcomers, while traditional banking is being redefined by fintech innovators like PayPal, Stripe, and Revolut, which are reinventing finance through digital payments, cryptocurrencies, and AI. In retail, platforms like Temu, Shopify, and Shein are redefining how brands engage with consumers. Similarly, in the entertainment sector, streaming services have fundamentally changed how we consume content. “Moreover, it's a common misconception that Amazon’s profitability primarily stems from its extensive marketplace," Nikola Krstic explains. "In reality, the majority of its operating income is derived from its cloud services. Across numerous industries, the true growth drivers are often less obvious, reinforcing the necessity for deeper analytical scrutiny.”
Anticipate, Adapt, Innovate
Greater market concentration also translates into heightened portfolio volatility. Recently, Nvidia saw $600 billion wiped off its market value in a single day due to a technical controversy.
“This loss equates to roughly seven times Luxembourg's GDP,” notes Matthieu Brino, Head of Portfolio Management at Midas Wealth Management. “ In today's fast-paced financial environment, where innovation continually rewrites market rules, portfolio management must extend beyond mere return optimization. More than ever, we must anticipate, swiftly adapt strategies, and embrace innovation.”
Asset management must take into account both market concentration and increasingly complex business models. “Technological advancements and emerging strategies significantly complicate corporate valuation. It is essential to develop a nuanced understanding of ongoing transformations within this ever-evolving landscape.”
We leverage multidisciplinary teams with complementary expertise
Democratization of Private Assets
To enhance portfolio performance and mitigate traditional market volatility, asset managers must broaden their investment universe. “Asset classes once reserved for sophisticated investors, such as Private Equity and Private Debt, are now accessible to a wider investor base, offering substantial new opportunities,” continues Matthieu Brino. “For example, assets under management in Private Equity reached $6.49 trillion in 2023, up from $4 trillion in 2020.”. In this environment, portfolio management cannot afford passivity. It requires advanced technical and specialized skills to seize these investment opportunities while ensuring effective risk management.
"We leverage multidisciplinary teams with complementary expertise," Matthieu Brino concludes. "Adopting a flexible, informed approach allows us to transform market challenges into strategic opportunities, always prioritizing rigorous risk management and meticulous asset selection."
3 questions for Antonella Michelino
Chief Executive Officer, Midas Wealth Management SA
Can you briefly introduce Midas Wealth Management?
Established in 2010 in Luxembourg, we provide comprehensive wealth management solutions tailored specifically for high-net-worth individuals. Today, we manage EUR 2.5 billion with a team of 25 professionals. Luxembourg's international orientation perfectly aligns with our clientele, enabling us to serve families across multiple jurisdictions effectively.
What are the needs of this type of clientele?
Our clients require customized wealth management solutions delivered by experienced professionals. We support them across asset management, estate structuring, real economy investments, and philanthropic activities.
What is your role within the Dreyfus Sons & Co Ltd, Banquiers group?
The group acquired the majority in our company since 2020, enabling the Swiss bank to expand its presence within the European Union and gain access to this market through Luxembourg. In return, Midas benefits from the longstanding expertise of Dreyfus Sons & Co Ltd, Banquiers. Sharing the same values, we are now building new synergies together as we look toward the future.
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