The “Magnificent 7” tech giants, including Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla, and Meta Platforms, have been leading the market rally this year due to the AI craze. Hedge funds have increased their exposure to these companies to a record high, with the Magnificent 7 now accounting for about 20.7% of hedge funds’ total U.S. single stock net exposure, the highest level on record.
Nvidia alone has seen a significant increase in market capitalization since its earnings report in May, adding about $470 billion. The Magnificent 7 now make up 31% of the S&P 500 weighting.
For investors looking to capitalize on this trend, there are several ETF options available. The Roundhill Magnificent Seven ETF (MAGS) offers equal-weight exposure to the Magnificent 7 stocks, while the MicroSectors FANG+ ETN (FNGS) tracks the NYSE FANG+ Index. The Vanguard Mega Cap Growth ETF (MGK) and Invesco S&P 500 Top 50 ETF (XLG) also provide exposure to these tech giants.
Overall, the AI craze is driving the market rally, and investors can consider these ETFs to take advantage of the hedge funds’ increased exposure to the Magnificent 7.