From Nasdaq: 2025-05-17 04:38:00

The “Magnificent Seven” consists of seven American tech companies dominating the market with a combined value of $16.7 trillion, representing 31.6% of the S&P 500. Investing in these companies, including Microsoft, Nvidia, Apple, Amazon, Alphabet, Meta Platforms, and Tesla, can outperform the market.

The Vanguard Mega Cap Growth ETF has more than half of its portfolio invested in the Magnificent Seven stocks. This ETF, established in 2007, consistently beats the S&P 500, offering investors exposure to top-performing companies like Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta Platforms, and Tesla, with concentrated holdings of just 69 stocks.

AI technologies are driving growth for the Magnificent Seven companies. Apple, Tesla, and Nvidia utilize AI in various products and services, while Microsoft, Amazon, and Alphabet are major customers of Nvidia’s data center chips for AI development. Meta Platforms leverages AI in its recommendation algorithms and AI assistant, Meta AI, with Llama family models.

While the Vanguard ETF focuses on tech giants, it also includes non-tech stocks for diversification. The ETF has delivered a compound annual return of 12.5% since 2007, outperforming the S&P 500. However, due to its concentrated holdings, it can be volatile, emphasizing the need for a balanced portfolio approach.

Investors seeking exposure to the Magnificent Seven should consider the Vanguard Mega Cap Growth ETF. This ETF may boost overall returns as it offers a mix of high-performing tech stocks and non-tech companies. Diversification is key to managing volatility and maximizing investment potential in the ETF.



Read more at Nasdaq: Meet the Unstoppable Vanguard ETF With 54.9% of Its Portfolio Invested in the “Magnificent Seven” Stocks