Are Index Funds Too Risky Now That They're Packed With AI Stocks? (FQF)

This week in Five Question Friday (FQF):

Question 1: Are index funds now too concentrated in AI stocks?

Question 2: Should you accept Fidelity's pitch to move $600,000 into a separately managed account (SMAs)?

Question 3: Why does a TIPS fund like IBIG yield about 5% when an individual TIPS yields less than 3%?

Question 4: Should your asset allocation adjust for taxes you'll eventually pay on IRA withdrawals?

Question 5: Why do retirement calculators like Boldin, Pralana, and ProjectionLab give such different Monte Carlo success rates?

Resources

My video on after-tax asset allocation: https://www.youtube.com/watch?v=iGhk2V_M308
My Boldin vs. Pralana vs. ProjectionLab comparison: https://www.youtube.com/watch?v=dPQNF-r_5jw

S&P 500 concentration (RBC, "The Great Narrowing"): https://www.rbcwealthmanagement.com/en-us/insights/the-great-narrowing-sp-500-concentration
Current S&P 500 weights (Slickcharts): https://www.slickcharts.com/sp500
Fidelity Managed FidFolios (direct indexing): https://www.fidelity.com/managed-accounts/managed-fidfolios
iShares iBonds Oct 2030 Term TIPS ETF (IBIG): https://www.ishares.com/us/products/333128/ishares-ibonds-oct-2030-term-tips-etf
5-Year TIPS real yield (FRED): https://fred.stlouisfed.org/series/DFII5
TIPS funds, phantom income, and taxes (Tipswatch): https://tipswatch.com/2026/05/24/ishares-target-date-tips-etfs-are-growing-in-appeal-but-i-have-cautions/
"After-Tax Asset Allocation," William Reichenstein (Financial Analysts Journal, 2006): https://papers.ssrn.com/sol3/papers.cfm?abstract_id=922293
Tax-adjusted asset allocation (Bogleheads wiki): https://www.bogleheads.org/wiki/Tax-adjusted_asset_allocation

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0:00 Intro
1:06 AI concentration in index funds
8:43 Fidelity's separately managed accounts (SMAs)
17:06 TIPS fund yield vs. an individual TIPS
21:58 Before-tax vs. after-tax asset allocation
26:07 Why retirement calculators disagree (Monte Carlo)

ABOUT ME

While still working as a trial attorney in the securities field, I started writing about personal finance and investing In 2007. In 2013 I started the Doughroller Money Podcast, which has been downloaded millions of times. I've since sold my websites, bought them back, and started a new website and this YouTube channel.

I'm also the author of Retire Before Mom and Dad--The Simple Numbers Behind a Lifetime of Financial Freedom (https://amzn.to/3by10EE)

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