Is AI making diversification harder?

AI is making conventional equity diversification less effective, while listed infrastructure may offer exposure to the AI build-out through different return drivers.

• Technology’s weight in the MSCI ACWI Index rose from around 10% to 31% since the Global Financial Crisis, and technology now contributes roughly half of overall index risk.
• Aberdeen’s analysis using a popular AI ETF as a proxy found two-year correlations of 0.79 with global equities, 0.69 with emerging markets and 0.75 with global small caps, based on data through August 2026.
• Cash, global bonds and listed property showed much lower correlations with AI, but historically required investors to sacrifice some return potential for diversification.
• Listed infrastructure can participate in AI adoption through the demand for power, networks and other enabling assets, rather than through the technology and sentiment drivers that dominate broader equities.
• NextEra Energy is cited as an example, with a large pipeline of electricity demand linked to hyperscalers and data centres.

Takeaway: Investors seeking diversification should focus on genuinely different economic drivers rather than simply adding more equity exposures, and listed infrastructure may provide a way to retain exposure to AI-related growth without duplicating the dominant AI return driver.