Big Tech’s market dominance might push extra investors to equal-weight exchange-traded funds, in accordance with VettaFi’s Todd Rosenbluth.
“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,” the agency’s head of analysis advised CNBC’s “ETF Edge” earlier this week.
Rosenbluth lists the Invesco S&P 500 Equal Weight ETF and the Invesco S&P 500 Equal Weight Technology ETF as choices for investors who wish to reduce exposure to the “Magnificent Seven.”
“You personal the identical corporations that you simply’d discover inside the S&P 500 or in the technology sector. But instead of being dominated by Apple and Microsoft and Nvidia, you spread that risk around to the other companies,” Rosenbluth mentioned.
Ahead of this week’s earnings from 5 of the Magnificent Seven names, BNY Mellon’s Ben Slavin famous flows have been sluggish into the group thus far this yr. Meanwhile, he discovered “less-loved” market teams together with financials and elements of real estate grabbing curiosity.
“In our conversations with advisors, [they’re] looking for somewhere else to go and are starting to get nervous based on [Big Tech] valuations,” the agency’s international head of ETFs mentioned.
CNBC’s Magnificent 7 Index, which is comprised of Apple, Alphabet, Meta, Microsoft, Amazon, Nvidia and Tesla, soared virtually 6% Friday. The index is up 68% over the previous 52 weeks.