- ORIGINAL NEWS
These ETFs could help investors reduce Big Tech exposure
- SUMMARY
Some investors are becoming concerned that a small number of large technology stocks have too much influence on the performance of popular ETFs tied to indexes like the S&P 500 and Nasdaq 100.
To address this, some investors are turning to equal-weight ETFs, which spread the risk across all the stocks in the index instead of being dominated by a few big names like Apple and Microsoft.
These ETFs provide exposure to the same companies but with a more balanced allocation.
As a result, investors are showing interest in “less-loved” market groups like financials and real estate, seeking diversity in their portfolios.
The Magnificent Seven Index, which includes these tech giants, had a strong week with a 6% increase but has shown signs of slowing growth this year.
- NEWS SENTIMENT CHECK
- Overall sentiment:
neutral
Positive
“CNBC’s Magnificent 7 Index, which is comprised of Apple, Alphabet, Meta, Microsoft, Amazon, Nvidia and Tesla, soared almost 6% Friday.”
“The index is up 68% over the past 52 weeks.”
Negative
“Investors are getting nervous that too much money is concentrated in a handful of stocks within the broader ETFs that they have available that [are] tied to the S&P 500 or even the Nasdaq 100,””
“Ahead of this week’s earnings from five of the Magnificent Seven names, BNY Mellon’s Ben Slavin noted flows have been sluggish into the group so far this year.”