Everyone told you the tracker fund was the sensible, boring, diversified choice. In 2026, that quietly stopped being true.
For years, whenever someone nervous asked me where to start, I’d point them somewhere reassuringly dull: a low-cost fund that tracks the whole market. Don’t try to be a hero, I’d say. Buy the haystack, not the needle. It was good advice. I still think it’s good advice. But I owe you an update, because the haystack has quietly changed shape while everyone was admiring it, and I’d feel like a fraud not to mention it.
Here’s my confession, for this one: I assumed “diversified” still meant what it meant when I first learned the word. Then I actually lifted the bonnet on a plain vanilla index fund this year and got a small fright. The thing I’d been calling a spread bet across hundreds of companies had, when I wasn’t looking, turned into a rather concentrated wager on a handful of them wearing a trench coat.
What changed
Let me explain how, because the mechanism matters far more than the fright. A market-cap index hands the biggest companies the biggest slice; that’s the deal, and normally the weights shift at a geological pace. But the artificial intelligence boom has vacuumed an enormous amount of value into a very small number of names, and the index trotted along behind, because following is the only trick it knows. The upshot is that the ten largest companies now make up something close to forty per cent of a broad total-market fund, and get on for half of the tech-heavier indexes people hold in their pensions. Buy the haystack today and, funnily enough, you’re mostly buying the same few needles just with extra steps.
Then came the moment that put a spotlight on it. In June, SpaceX went public in the largest listing in history, priced at a valuation near $1.75 trillion, raising around 75 billion, a figure that later climbed higher still. It alone accounted for roughly two-thirds of every dollar raised in US listings this year, and it’s already being fast-tracked into a major tech index. Two more giants, reportedly the AI firms Anthropic and OpenAI, may follow, though timing may shift, so treat that as expected rather than certain. When companies this size arrive, the passive funds tracking those indexes have to buy them. Which means millions of people will own a slice of them without ever choosing to.
Why does this get under my skin?
You know my brand enemy by now: a system where the real risk is tucked out of sight of the ordinary person who was never told it was there. And this is a textbook case. Nobody sat you down and said, “Just so you are aware, your sensible little pension tracker is now a punchy bet on whether artificial intelligence keeps compounding forever.” Of course they didn’t; it wouldn’t fit on a leaflet. The exposure crept in on tiptoe, through a mechanism almost nobody has ever had explained. And the price tag isn’t exactly a bargain either: the broad US market has been trading at a valuation well above its long-run average, the kind of stretch that quietly assumes everything goes right, on schedule, with no surprises. Markets adore surprises.
Now, in fairness, and I always want to give you the other side, plenty of serious people think this bull market has further to run. Goldman Sachs, for one, still sees the main US index climbing higher by year-end, and they may well be proven right. Concentration isn’t the same as catastrophe. A market can lean on a few winners for a long time before anything breaks, and sometimes those winners genuinely deserve it. I’m not ringing an alarm bell. I’m switching a light on.
How I think about it
So what do I actually do with this? Nothing dramatic, no bonfires, no grand gestures. I don’t dismiss the boring haystack; it’s still one of the most sensible tools we will ever get our hands on. But I look at it with the lights on now. I know what’s inside it, I know what it’s really wagering on, and I ask whether anything else is quietly placing the bet in a different hat. Awareness first, always. This is the natural next chapter to a question I asked recently about where all that money went when it fled crypto. A lot of it walked next door into AI. This is a look at the house it walked into.
Before you scroll on
Open the bonnet on whatever you own. Not because it’s broken, but because you deserve to know what you’re actually holding not what you were told you were holding years ago. The label and the contents have drifted apart, and the gap between them is exactly where quiet risk likes to hide. Go and look. It’s your money, and knowing what’s in it is the whole game.
The Jacqueline Brand — knowledge builds confidence, and confidence builds wealth. This is editorial commentary for information and education only. It is not financial, investment or professional advice, and nothing here is a recommendation to buy or sell any investment. The Jacqueline Brand is not authorised or regulated by the Financial Conduct Authority. The value of investments can fall as well as rise, and past performance is not a guide to future returns. Figures were correct at the time of publication. Always do your own research and consider speaking to a regulated adviser. Where cryptoassets are discussed, they are high risk and largely unregulated in the UK, and you could lose all the money you invest. The Collection
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