Roundhill Launches Pair of Magnificent Seven ETFs

Roundhill Investments, the thematic ETF issuer with $870.7 million in assets, is doubling down on the Magnificent Seven with a pair of funds, including one for bets the stocks will rise and the other for investors who want to profit on their decline. 

The asset manager known for its metaverse and gaming exchange-traded funds launched the Roundhill Daily 2X Long Magnificent Seven ETF (MAGX), which offers twice the daily performance of the famed seven tech equities, by investing at least 80% of its portfolio in equal weight exposure to Nvidia Corp., Meta Platforms Inc., Apple Inc., Amazon.com Inc., Alphabet Inc., Microsoft Corp. and Tesla Inc. The Roundhill Daily Inverse Magnificent Seven ETF (MAGQ) give inverse exposure to the same basket of stocks. 

The funds, which began trading today, are designed for "sophisticated traders," the company said in a statement. MAGX dropped 1.6% to $25.15 in afternoon trading while MAGQ rose 0.1% to $24.86.

The seven stocks were coined the “Magnificent Seven” as they largely drove the bull market that started last year. The group makes up about a quarter of the value of the 3,700 or so publicly traded U.S. companies. Fueled by artificial intelligence excitement and the launch of AI products such as Chat GPT, investors bet big on chipmakers like Nvidia and chatbot creators such as Microsoft.

“We saw an opportunity to provide both investors and traders with the full toolkit to express their opinion on the Magnificent Seven,” explained Dave Mazza, Chief Strategy Officer of Roundhill in an interview with etf.com about the new launches. 

The launch follows the November conversion of Roundhill's BIGT fund into the Roundhill Magnificent Seven ETF (MAGS), which has not had a day of outflows so far this year, pulling in $106.2 million while gaining 13%, according to etf.com data. 

While MAGS is for investors, MAGX and MAGQ is for traders, Mazza said.

“Particularly the 2x version is only appropriate for traders who have the ability to monitor their positions on a daily basis,” explained Mazza.

More Like 'Mag 4' 

While the Magnificent Seven drove the S&P 500 to record highs and pushed the Invesco QQQ ETF (QQQ) to gain over 50% last year, in 2024 only four of the seven stocks have really pulled their weights.

Nvidia, Amazon, Meta, and Microsoft have been responsible for 75% of the S&P 500’s gain in 2024, according to a research note from LPL Financial. 

Yet some members are dragging the group down. Most notably, Tesla has fallen nearly 20% year to date. The Mag Seven index is only outperforming the S&P 500 by 5% so far in early February, while at the same time last year it was outperforming by 23%.

However, Mazza said he doesn’t think the "Mag Seven" grouping is an already fading trend.

“I think that Mag Seven, whether its on stock leading the charge, three, or the entirety of them, is more emblematic as a term,” said Mazza. “We have confidence in the names that are identified.”

Contact Lucy Brewster at [email protected].