As I see it, “diversification” has become a casualty of the indexing age. But that hasn’t stopped investors from pursuing it. I’ve sat quietly for a while, not really pressing my case. But that’s over. Here it is, an obituary of sorts for portfolio diversification.
If you own the five biggest tech-focused ETFs — QQQ, XLK, VGT, FTEC, and SMH — you likely believe you have a balanced exposure to different parts of the growth engine. The reality is far less exciting. As of late March 2026, these funds have morphed into different beta versions of the exact same trade, highly correlated and increasingly vulnerable to the same single point of failure.
