VettaFi’s Todd Rosenbluth said Big Tech’s market power could drive more investors into equal-weight exchange-traded funds.
“Investors are nervous that too much money is concentrated in a small number of stocks within the wide range of ETFs available. [are] It tracks the S&P 500 and even the Nasdaq 100,” the firm’s head of research told CNBC’s “ETF Edge” earlier this week.
Rosenbluth points to the Invesco S&P 500 Equal Weight ETF and the Invesco S&P 500 Equal Weight Technology ETF as options for investors who want to reduce their exposure to the Magnificent Seven.
“We own the same companies that are in the S&P 500 and the technology sector, but instead of being dominated by Apple, Microsoft, and Nvidia, we spread that risk among other companies,” Rosenbluth said. said.
Ahead of this week’s earnings for five of the Magnificent Seven names, BNY Mellon’s Ben Slavin noted that capital flows into the group have slowed so far this year. Meanwhile, he said, he has noticed that “less loved” market groups such as finance and parts of real estate are gaining interest.
“During my conversation with my advisor, [they’re] I’m looking for somewhere else to go and I’m starting to get anxious. [Big Tech] ” said the firm’s global head of ETFs.
CNBC’s Magnificent 7 index, which includes Apple, Alphabet, Meta, Microsoft, Amazon, Nvidia and Tesla, soared nearly 6% on Friday. The index has risen 68% over the past 52 weeks.
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