MAGS: Mag 7 ETF Lags as Market Hits New Record Highs
- 4 of the Mag 7 members are below their highs.
- The mixed performance of the group has weighed on the MAGS ETF.
The stock market is back at all-time highs, but the Magnificent Seven stocks aren’t leading the charge—at least not collectively.
The Roundhill Magnificent Seven ETF (MAGS), which holds equal weights in Apple Inc. (AAPL), Microsoft Corp. (MSFT), Nvidia Corp. (NVDA), Alphabet Inc. (GOOGL), Amazon.com Inc. (AMZN), Meta Platforms Inc. (META) and Tesla Inc. (TSLA), is up only 2% year to date.
That’s a far cry from the performance of the Invesco QQQ Trust (QQQ), which is up 9%, and the Vanguard S&P 500 ETF (VOO), which has gained 7% over the same period.
MAGS Lags
MAGS remains more than 4% below its December 2024 record high, even as the broader indexes like the S&P 500 and Nasdaq-100 notch new all-time highs. That disconnect reflects both stock-specific issues and the ETF’s design.
While a few Magnificent Seven names—most notably Nvidia and Microsoft—have surged to new highs on the back of strong demand for AI-related products and services, others have lagged significantly.
Apple is nearly 20% off its peak amid concerns that it’s falling behind in AI and facing headwinds from U.S.-China trade tensions.
Tesla has tumbled almost 40% from its highs, with its core EV business under pressure and CEO Elon Musk’s increasingly political profile weighing on sentiment. A muted rollout of the company’s robotaxi service hasn’t helped.
Alphabet, meanwhile, is about 13% below its highs, as investors continue to debate whether AI chatbots pose a long-term threat to its search dominance.
Amazon, down about 8%, has benefited from AI-driven growth in its AWS division, but concerns linger about potential tariff impacts on its e-commerce business.
Meta is trading even with its highs from February. The company is widely viewed as an AI winner, using the technology to enhance engagement on its social media platforms while aggressively recruiting top AI talent from tech rivals like OpenAI, Alphabet and Apple.
Equal Weight Structure Impacting Performance
Still, the mixed performance of the group has weighed on the MAGS ETF. The fund’s equal-weight structure means it allocates the same to each stock regardless of size, a disadvantage in 2025, as the two largest names, Nvidia and Microsoft, outperform while smaller components like Tesla struggle.
Despite its tepid performance, MAGS has attracted $457 million of inflows this year, bringing its total assets to $2.3 billion.
Interestingly, the Defiance Large Cap Ex-Mag 7 ETF (XMAG), which holds the largest 500 U.S. stocks but excludes the Magnificent Seven, is up 8.5% year to date, outpacing both VOO and MAGS. That suggests, at least so far in 2025, that sidestepping the tech giants has been a winning strategy.
That may not hold over longer periods. But for now, the Magnificent Seven haven’t been quite so magnificent.
