Is it time to abandon Magnificent 7 stocks? There’s an ETF for that
Mar 21, 2025

Investing.com -- After years of massive outperformance, the Magnificent 7 stocks are having a rough start to 2025.

The Mag 7 group comprises tech giants NVIDIA (NASDAQ: NVDA ), Apple (NASDAQ: AAPL ), Alphabet (NASDAQ: GOOGL ), Amazon (NASDAQ: AMZN ), Microsoft (NASDAQ: MSFT ), Meta (NASDAQ: META ), and Tesla Inc (NASDAQ: TSLA ). The group is down 14.4% on average this year, with Meta the lone stock in positive territory (but just barely) and Tesla the weakest performer year-to-date at -41.5%.

Investors heavily invested in the Mag 7 stocks are seriously considering their exposure amid the underperformance.

Enter XMAG (NASDAQ: XMAG ), an ETF created by Defiance ETFs to exclude the Mag 7 stocks.

XMAG seeks to offer a broad and balanced view of the U.S. equity market by encompassing the 500 largest publicly traded securities while deliberately excluding Mag 7 stocks.

The ETF is flat on the year versus the sell-off in Mag 7 stocks and the 4.3% downdraft in the S&P 500 .

Some of XMAG’s top holdings include Broadcom (NASDAQ: AVGO ), Eli Lilly (NYSE: LLY ), Berkshire Hathaway B (NYSE: BRKb ), JPMorgan Chase & Co (NYSE: JPM ), and Visa Inc . (NYSE: V ), among many other non-Mag 7 stocks.

“XMAG is used as a core replacement for your large cap exposure, a direct replacement of SPY,”  Sylvia Jablonski, CEO of Defiance ETFs, told Investing.com. “Most investors and advisors are overly exposed to Mag 7 via mutual funds , ETFs and stock portfolios. This is a direct way to diversify and manage concentration risk, and participate in the broadening out of equity performance which is playing out this year.”

Should you get into XMAG?  Talk to your broker, but it is definitely a unique way to go ex-Mag 7, or at least limit your exposure.