Magnificent Seven ETF Surges as Laggards Turn to Leaders
Tesla, Alphabet and Apple surged, pushing MAGS higher.
Don’t count out the Magnificent Seven. In April, there was a lot of talk about how the mag-7 stock should be rebranded as the “Fabulous Four” or the “Tremendous Two” because some of the stocks in the group were lagging.
But that talk has quieted down recently as the laggards became leaders.
Tesla, Inc. (TSLA), the most beaten down of the bunch, surged as much as 37% in a matter of days as the world’s largest manufacturer of electric vehicles pushed aggressively ahead with its robo-taxi plans.
Alphabet, Inc. (GOOG) once feared to be dropping the ball on AI, rocketed to record highs after it reported strong first quarter earnings that reassured investors about its technological edge.
And Apple, Inc. (AAPL), another company that seemed to be falling behind its peers when it comes to AI, assuaged those fears with its earnings report on Friday. Announcing its intention to buy back another $110 billion worth of its stock didn’t hurt either.
With almost all of the Magnificent Seven rolling, tech-heavy ETFs like the $260 billion Invesco QQQ Trust (QQQ) benefited. The fund gained nearly 5% from its April lows and sits around 2.3% below its all-time highs.
Mag 7 ETF a Winner
Another winner from the rally was the Roundhill Magnificent Seven ETF (MAGS).
The fund, which has $257 million in assets under management, and was recently named the winner of etf.com’s best new ETF of the year award for 2023, surged 9% from its April lows.
The ETF is a mere 1.5% off its all-time high set in April.
Notably, MAGS is an equal-weighted ETF, which means that the smallest among the mag-7—Tesla, Inc. (TSLA)—gets the same weighting in the fund as the largest—Microsoft Corp (MSFT).
It’s a weighting scheme that paid off over the last couple of weeks, with Tesla strongly outperforming Microsoft and all other members of the Magnificent Seven.
