Inverse/Leveraged Magnificent Seven ETFs Hit the Market

zacks03-12

The "Magnificent Seven" typically refers to the 1960 Western film, but today’s stock market investors recognize the term as the set of seven big tech stocks, namely Apple (AAPL), Microsoft (MSFT), ...

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These stocks also bet big on artificial intelligence  – the red-hot topic in the tech world currently. Apart from AI, these stocks are associated with several kinds of disruptive technologies (read: Will Apple ETFs Gain Momentum After Announcement of AI Project?).But such a stupendous rally caused by AI enthusiasm, at times makes Magnificent Seven overvalued too. One of the pillars of Magnificent Seven – NVIDIA – boasts a forward P/E of 34.08X. Microsoft has a forward P/E of 35.57X","collect":0,"end_time":0,"defaultTopTitle":"zacks.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0943347566.SGD":"安联收益及增长平衡基金AM H2-SGD","SSO":"两倍做多标普500ETF","LU0238689110.USD":"贝莱德环球动力股票基金","SH":"标普500反向ETF","IVV":"标普500指数ETF","LU0557290698.USD":"施罗德环球可持续增长基金","MAGX":"ROUNDHILL DAILY 2X LONG MAGNIFICENT SEVEN ETF","LU0456855351.SGD":"JPMorgan Funds - Global Equity A (acc) SGD","LU0642271901.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD-H","OEX":"标普100",".SPX":"S&P 500 Index","SPXU":"三倍做空标普500ETF","MSFT":"微软","LU0079474960.USD":"联博美国增长基金A","LU0056508442.USD":"贝莱德世界科技基金A2","MAGQ":"ROUNDHILL DAILY INVERSE MAGNIFICENT SEVEN ETF","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","BK4587":"ChatGPT概念","LU0061474960.USD":"天利环球焦点基金AU Acc","SPY":"标普500ETF","IE00BMPRXR70.SGD":"Neuberger Berman 5G Connectivity A Acc SGD-H","LU0128525689.USD":"TEMPLETON GLOBAL BALANCED \"A\"(USD) ACC","BK4077":"互动媒体与服务","NVDA":"英伟达","META":"Meta Platforms, Inc.","IE0004445015.USD":"JANUS HENDERSON BALANCED \"A2\" (USD) ACC","LU0320765489.SGD":"FTIF - Franklin Mutual US Value A Acc SGD","OEF":"标普100指数ETF-iShares","LU0061474705.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN \"AU\" (USD) ACC","LU2087621335.USD":"ALLSPRING GLOBAL FACTOR ENHANCED EQUITY \"A\" (USD) ACC","UPRO":"三倍做多标普500ETF","LU2326559502.SGD":"Natixis Loomis Sayles US Growth Equity P/A SGD-H","SDS":"两倍做空标普500ETF","FDN":"First Trust Dow Jones Internet I","IE00BD6J9T35.USD":"NEUBERGER BERMAN NEXT GENERATION MOBILITY \"A\" (USD) ACC","GOOGL":"谷歌A","BK4511":"特斯拉概念","LU0211327993.USD":"TEMPLETON GLOBAL EQUITY INCOME \"A\" (USD) ACC","TSLA":"特斯拉","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","AAPL":"苹果","LU1551013425.SGD":"Allianz Income and Growth Cl AMg2 DIS H2-SGD","AMZN":"亚马逊","IE00BJTD4N35.SGD":"Neuberger Berman US Long Short Equity A1  Acc SGD-H","LU0289941410.SGD":"AB FCP I Dynamic Diversified AX SGD","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC"},"translate_title":"反向/杠杆化的七大交易所交易基金上市","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AAPL":1,"MAGQ":1,"MAGX":1,"META":1,"MSFT":1,"NVDA":1,"GOOGL":1,"TSLA":1,"AMZN":1,"SPY":0.9,"FDN":0.9,"UPRO":0.6,"OEF":0.6,"OEX":0.6,"SDS":0.6,"SH":0.6,"SPXU":0.6,"SSO":0.6,".SPX":0.6,"ESmain":0.6,"IVV":0.6},"content_text":"The \"Magnificent Seven\" typically refers to the 1960 Western film, but today’s stock market investors recognize the term as the set of seven big tech stocks, namely Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Nvidia (NVDA), Meta Platforms (META) and Tesla (TSLA). Magnificent Seven have contributed massively to 2023’s Wall Street’s rally. Roundhill Magnificent Seven ETF (MAGS Quick QuoteMAGS  -  Free Report)     has gained 18.2%, way higher than the broader market and is up 57.9% since Apr 2023.Investors’ interest with \"Magnificent Seven\" is at sky high, which inspired Roundhill Investments to launch the double-leveraged ETF on this concept, namely RoundhillDaily 2X Long Magnificent Seven ETF (MAGX). However, although the potential about these fabulous seven stocks is pretty high, risk factor cannot be overruled. As a result, Roundhill Investments also launched an inverse fund on the same concept to give investors access to gains while \"Magnificent Seven\" are falling. The name of the fund is Roundhill Daily Inverse Magnificent Seven ETF (MAGQ).Both funds hit the market on Feb 29, 2024.Inside the Newly-launched ETFsRoundhill Daily 2X Long Magnificent Seven ETF (MAGX)The actively-managed fund looks to track daily leveraged investment results, before fees and expenses, that correspond to two times (2X) the performance of the Roundhill Magnificent Seven ETF. As a result, the fund may be riskier than alternatives that do not use leverage because the fund’s objective is to magnify the daily performance of the Magnificent Seven ETF. The fund charges 95 bps in net fees.Roundhill Daily Inverse Magnificent Seven ETF (MAGQ)The actively-managed fund seeks daily investment results, before fees and expenses, that correspond to the inverse (-1X) of the performance of the Roundhill Magnificent Seven ETF. The return of the fund for periods longer than a single day will be the result of its return for each day compounded over the period. The net fee of the funs is 0.95%.How Do They Fit In a Portfolio?This group has made the S&P 500 more concentrated than ever, which means this key U.S. equity gauge’s further boom or doom depends on these seven stars.\" At the current level, S&P 500 ETF – SPDR S&P 500 ETF Trust (SPY Quick QuoteSPY  -  Free Report)     – invests more than 25% in Magnificent Seven stocks.The expectations of a less-hawkish Fed should boost Magnificent Seven even more as the stocks are high-growth in nature and should do well in a low-rate environment. These stocks also bet big on artificial intelligence (AI) – the red-hot topic in the tech world currently. Apart from AI, these stocks are associated with several kinds of disruptive technologies (read: Will Apple ETFs Gain Momentum After Announcement of AI Project?).But such a stupendous rally caused by AI enthusiasm, at times makes Magnificent Seven overvalued too. One of the pillars of Magnificent Seven – NVIDIA – boasts a forward P/E of 34.08X. Microsoft has a forward P/E of 35.57X. Amazon.com has a P/E of 43.50X. These stocks have a way higher P/E ratio than the S&P 500 (i.e. P/E of 23.27X) (read: More Rally Awaits ETFs as Nvidia Hovers Around $2Tn Market Cap?).Plus, big Tech grapples with three regulatory hurdles: Privacy, content oversight, and antitrust scrutiny. These tech giants face challenges in safeguarding user privacy, moderating content, and addressing potential antitrust actions. Big Tech companies are currently under intense antitrust scrutiny, with regulators examining their market dominance and potential anti-competitive practices. Hence, a downside protection in the form of ETF is also needed. This purpose will be served by MAGQ.As far as competition is concerned, these funds together do not face much competition from pureplay ETFs. However, these seven stocks have individual exposure to several sectoral ETFs (read: Guide to the Magnificent Seven Stocks & ETFs Investing).","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2419550018"}