February 10, 2026
By Matthew Vegari, Head of Research
As global stock markets teeter near all-time highs, the Research Desk sought to investigate what this exceptional, multiyear run for equities has meant for portfolios. In this brief, we leverage Clearwater’s proprietary database and explore recent trends in allocations, industry exposure, and stock concentration. (Unsurprisingly, this is a story of an AI-stock boom.)
A rapid rise in the stock market—approximately 20% annualized returns for the S&P 500 since 2023—has put equities back in the driver’s seat. Amid this surge, have portfolios rebalanced accordingly? To answer this question, the Research Desk looked at two cohorts of asset owners who have strong exposure to equities: private wealth (e.g., family offices and ultra-high net worth individuals) and nonprofits (e.g., endowments and universities).
The tactical differences are stark. Over the past 24 months, the average allocations to equities for private wealth clients has grown by 4 percentage points, from 52% to 56%. For nonprofits, it has hardly shifted at all.
The rise in equities for private wealth investors has been cannibalizing exposure to cash, fixed income, and alternatives (e.g., private credit and REITs). Will rebalancing finally occur in 2026? Given recent shifts in industry exposure (see below), we are disinclined to believe this, barring a large market correction that ipso facto rebalances portfolios for these asset owners.
The run in equities has been largely tech- and AI-driven. The Research Desk wanted to investigate what this has meant tactically: Have investors shifted where their money is?
An unequivocal yes. We examined book value allocations, which reveal tactical moves over the past 12 months. Consumer stock exposure has declined steeply, while technology and communications stock holdings have surged. The distinction matters: book value reflects actual purchase decisions and active allocation changes, whereas market value can shift simply due to price appreciation. What we’re seeing isn’t passive drift but deliberate repositioning.
(Note: Many tech darlings have underperformed the broader market YTD. The Research Desk investigated whether asset owners have trimmed their portfolios accordingly in early 2026. Holdings data show this is not the case.)
Private wealth clients have cut consumer sector exposure by roughly two percentage points over the past 12 months, relative to the book value of their total stock portfolio. That capital has largely been redirected to communications (+1.5 points) and technology (+0.7 points). Here nonprofits, who have rebalanced their overall portfolios (keeping equities in check), show similar patterns. Investors aren’t just enjoying the AI-fueled rally—they’re doubling down on it.
With this pivot, portfolios are increasingly concentrated in a narrower set of names. Like the S&P 500 itself, the rise in these industries is skewing composition. Over the past few years, Clearwater’s database shows it takes far fewer stocks to reach 50% of the market value of a typical portfolio.
In early 2024, the median private wealth portfolio required approximately 21 stocks to account for half of the market value of their stock holdings. Today, that figure has fallen to just 13 stocks—a function of both rapid market value growth in mega-cap tech names and continued buying (book value increases) in the AI trade.
This concentration carries implications. On one hand, investors have captured substantial gains by maintaining exposure to market leaders. On the other, portfolios have become more vulnerable to sector-specific volatility. A major correction in technology stocks—however unlikely it may seem today—would reverberate across portfolios far more dramatically than in years past. The question facing asset owners isn’t whether concentration has occurred (it certainly has) but whether current levels remain prudent.
The above research was featured in the Wall Street Journal on February 10, 2026.
Additional research by Tyler Busby, Data Scientist