His fund skipped Nvidia. It's up 55% in four years, and the S&P 500 is up 126%. Then Thursday came.

Stock pickers who skipped AI have lagged for four years. Thursday gave them one good day, and one day doesn't settle it.

By Sean Anees Saifi · Capital Wealth · Published Friday, October 23, 2026 · Source: The Wall Street Journal, Wednesday, October 21, 2026, whose market figures are the Tuesday, October 20 close (Business & Finance)

Key Points

The Vanguard Dividend Growth Fund is up 55% over four years through Oct. 16. The S&P 500 is up 126%. The fund held no Nvidia as of June 30.
Nvidia (NVDA) has risen more than 1,300% since the end of 2022. Meta and Alphabet have more than tripled. The fund had minimal exposure to both.
Active large-cap managers began the year with 28.4% in AI stocks against 36.5% for the index, per Morningstar. Across active stock funds and ETFs, 70% trailed their benchmarks through Oct. 8.
The managers name the weak spots as neoclouds like CoreWeave (CRWV), which fell about 25% last week, and memory-chip makers. Micron (MU) is held in 23 books.
On Thursday, Oct. 22, the chip index fell 6.72%. The equal-weight S&P 500 fund (RSP) rose 0.73% while the cap-weighted fund fell 1.18%.

55%

Vanguard Dividend Growth Fund, four years through Oct. 16

126%

S&P 500 over the same four years

70%

Active stock-fund managers trailing their benchmark this year through Oct. 8

1,300%

Nvidia's rise since the end of 2022, the stock the fund skipped

A gray-haired man in a navy shirt rests his chin on his hand at a desk of market monitors, printed reports open beside him in warm office light.

Four years of lagging, then one good day. The label on a fund tells you the goal. The holdings tell you what you own.

In one line: A manager who skipped Nvidia trails the S&P 500 by a mile after four years, and Thursday's AI selloff shows why neither being early nor chasing is a plan.

Timothy Casaletto's fund didn't own Nvidia (NVDA). The stock has risen more than 1,300% since the end of 2022. His Vanguard Dividend Growth Fund is up 55% over the past four years. The S&P 500 is up 126%. “The last four years have not been fun,” he told the Journal.

Casaletto is a portfolio manager at Wellington Management. He became a co-manager of the Vanguard fund in July. Before that, he was an analyst on the team. As of June 30, the fund held no Nvidia at all. It had only a little Meta (META) and Alphabet (GOOGL), which have more than tripled. Last week his fund rose 1.9% while AI stocks fell, and the S&P 500 dropped by about that much. He has high conviction the AI trade will roll over hard at some point. That's his view, not ours. The weak spots he names are borrowing costs for neoclouds like CoreWeave (CRWV), which fell about 25% last week, and a slower data-center build-out. Others in the story call memory-chip makers and cloud companies the speculative end of the trade.

He has plenty of company. Morningstar looked at active large-cap funds holding nearly $11 trillion. They began the year with 28.4% in AI stocks, against 36.5% for the index. That's a gap of more than 8 points. It helps explain why 70% of active stock fund and ETF managers trailed their benchmarks this year through Oct. 8. Manish Gupta of First Eagle owns Alphabet, Meta and Microsoft but is wary of the speculative corners. His U.S. and Global funds returned 8.9% and 9.9%, behind their benchmarks. “We are better safe than sorry,” he said. Mike Nicolas of Oakmark says he isn't anti-AI. His fund is up 8% this year and owns no Nvidia, AMD or Snowflake. At the end of September its biggest holding was Salesforce, down about 8.5% this year on fears AI will hurt it.

Then Thursday came

On Thursday, Oct. 22, the AI names fell. The chip index lost 6.72%. The equal-weight S&P 500 fund (RSP) rose 0.73% while the cap-weighted fund (SPY) fell 1.18%. For the skeptics, it was a good day. One day doesn't settle four years. Gregory Zuckerman and Gunjan Banerji wrote the story for the Journal.

Our read

This is a Behavioral story with an Investments/Risk IN04 lesson. There are two ways to lose here. Being early is one. Casaletto's fund has paid that cost for four years, and it's still paying it. Chasing is the other. Anyone who piled into chip stocks on Wednesday's rally paid that one on Thursday. The house doesn't pick a side. Its books hold the big AI names at weight, and nine of them also hold the equal-weight fund (RSP). Nvidia is held at weight in 31 books and Micron in 23. CoreWeave sits in one satellite sleeve at 16%. Nothing added to any of them. Our verdict is hold.

Here's the connection to your own plan. Your 401(k) or 403(b) menu likely has a fund called dividend growth, large-cap value or something close. Pull up its top ten holdings this week. Casaletto's fund held no Nvidia as of June 30. Another fund with a similar name might be heavy in the same AI names that fell on Thursday. The label tells you the goal. The holdings tell you what you own. It's easier to read that list on a calm week than during a drop. If it isn't what the name led you to expect, bring it to a review.

What It Means For Your Portfolio

Hold. Index at weight plus equal weight; nothing added.

Being early and chasing both cost you. Owning the broad market, with an equal-weight slice beside it, means you don't have to bet on one side.

General planning principles, not advice for anyone in particular. A manager who skips the biggest stocks can trail for years even when he's right about the risk. A fund that chases them can get hit in a day. Neither is a plan you can live on.

One approach is to hold the broad index and, if your plan offers one, an equal-weight or value fund beside it. Then stop scoring yourself against the hottest trade of the year.