##  [# Tema Launches New ETF to Combat Concentration Risk](/sections/news/tema-launches-new-etf-combat-concentration-risk) 

 

# Tema Launches New ETF to Combat Concentration Risk

 

 

TEMA's new exchange-traded fund, DSPY, seeks to combat concentration risk on the S&P 500.



 

 

 

 

 [![Malika](/sites/default/files/styles/author_image_icon/public/2025-03/Headshot%203.png?itok=STS0LyKG)](/authors/mallika-mitra) 

[By Mallika Mitra](/authors/mallika-mitra)

 Apr 01, 2025

 Edited by: David Tony

 

 

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The U.S. stock market is highly dependent on just a few stocks. A new exchange-traded fund is trying to combat that concentration risk.

On Tuesday, the **Tema S&amp;P 500 Historical Weight ETF Strategy (DSPY)**, which seeks to reflect the S&amp;P 500 but adjusts company weightings to match the S&amp;P 500's average concentration level since 1989, hit the market, according to Tema’s [press release](https://www.businesswire.com/news/home/20250401952675/en/Tema-Launches-the-SP-500-Historical-Weight-ETF-Strategy-DSPY-First-SP-500-Concentration-Innovation-Since-2003). The expense ratio is 0.18%.

While investors have previously relied on the S&amp;P 500 Equal Weight to mitigate concentration risk, the overlap between the S&amp;P 500 and its equal-weight counterpart is at a multi-decade low, making the S&amp;P 500 Equal Weight a less feasible solution to S&amp;P 500 concentration, Maurits Pot, founder and CEO at Tema ETFs, told etf.com. DPSY allows investors to keep their S&amp;P 500 exposure but with lower concentration and lower volatility, and it avoids the rigidity of a cap that an equal-weight has, he said.

“It’s a two-in-one solution,” Pot added.

## Addressing Concentration Risk 

In recent years, a handful of tech giants have dominated the U.S. stock market. As of the market close on March 31, the top-10 stocks in the S&amp;P 500 index accounted for roughly 34% of the overall index, according to data from [S&amp;P Dow Jones Indices](https://www.spglobal.com/spdji/en/indices/equity/sp-500/#data).

[Apple Inc. (AAPL)](https://www.etf.com/stock/AAPL) makes up 7%, while [Microsoft Corp. (MSFT)](https://www.etf.com/stock/MSFT) makes up 5.9% and [Nvidia Corp. (NVDA)](https://www.etf.com/stock/NVDA) comes in at 5.6%. [Amazon.com Inc. (AMZN)](https://www.etf.com/stock/AMZN), [Meta Platforms Inc. (META)](https://www.etf.com/stock/META), [Alphabet Inc. (GOOGL)](https://www.etf.com/stock/GOOGL) and [Tesla Inc. (TSLA)](https://www.etf.com/stock/TSLA)—the other “[Magnificent Seven](https://www.etf.com/sections/news/magnificent-seven-turbocharged-etf-gains-2024)” stocks—are among the other behemoths that highly influence the index.

Last year, Morgan Stanley analysts [reported](https://www.morganstanley.com/im/publication/insights/articles/article_stockmarketconcentration.pdf) that the rate of increase in U.S. stock market concentration in the last decade is the most rapid since 1950.

The top-10 holdings in DSPY will seek to represent just 22% of the total exposure, according to the press release.

 
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 [ Mallika Mitra ](/authors/mallika-mitra) 

 

 

  Mallika Mitra is an experienced business and financial journalist. Her work can be found in Barron's, Kiplinger, CNBC, Bloomberg News, Bankrate, USA…   [View Bio](/authors/mallika-mitra)

 



 

 


 Related Topics  [Equal-Weighted](http://www.etf.com/topics/equal-weighted) 

 [Technology](http://www.etf.com/topics/technology) 

 [Morgan Stanley](http://www.etf.com/topics/morgan-stanley)