(Pixabay)

Forget the FANGs: Goldman Sachs has adopted a new acronym for the most powerful drivers of the S&P 500 and the Nasdaq.

"While FANG has dominated investor focus, the nature of the acronym has expanded more broadly to encompass mega-cap tech," Robert Boroujerdi and his colleagues wrote in a note on Friday.

"Indeed, the bigger story in our view is FAAMG — Facebook, Amazon, Apple, Microsoft and Alphabet — a group of five stocks which have been the key drivers of both the SPX & NDX returns year-to date."

Combined, the FAAMG stocks have added $660 billion in market value this year.

(Goldman Sachs)

As with FANG, the G in FAAMG represents Google, the best-known company under the Alphabet umbrella. FAAMG also adds Apple to the list. But Goldman excluded Netflix, the N in FANG, and Nvidia, the red-hot tech stock that is up 249% in the past year, saying they are not yet large enough and are more volatile.

The FAAMG stocks on the other hand are displaying lower volatility, much as the rest of the market is. As its own sector, FAAMG would have the lowest volatility in the market, Goldman says, though that could end up being a problem.

"We believe low realized volatility can potentially lead people to underestimate the risks inherent in these businesses including cyclical exposure, potential regulations regarding online activity or antitrust concerns or disruption risk as they encroach into each other’s businesses," Boroujerdi wrote.

Goldman expects that passive investors who are chasing a low-volatility strategy would move into the FAAMGs. "The fear is that if fundamental events cause volatility to rise, these same passive vehicles will sell and exacerbate downside volatility," the note said.

Back in April, Randy Phinney at Right Side of the Chart wrote about how the FAAMG stocks were leading the Nasdaq and the rest of the market to all-time highs. He noted that FANGs got all the attention probably because the acronym was easier to say.

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