Big Tech’s market dominance could push more investors into exchange-traded funds of equal weight, according to VettaFi’s Todd Rosenbluth.
“Investors are concerned that too much money is concentrated in a handful of stocks within the broader ETFs they have available. [are] tied to the S&P 500 or even the Nasdaq100” the firm’s head of research told CNBC’s “ETF Edge” earlier this week.
Rosenbluth lists i Invesco S&P 500 Equal Weight ETF and the Invesco S&P 500 Equal Weight Technology ETF as options for investors looking to reduce exposure to the “Magnificent Seven”.
“Own the same companies you would find in… S&P500 or in the technology sector. But instead of being dominated by Apple, Microsoft and Nvidia, you spread the risk to the other companies,” Rosenbluth said.
Ahead of this week’s gains from five of the Magnificent Seven names, BNY Mellon’s Ben Slavin noted that flows into the group have been slow so far this year. Meanwhile, he also found “less popular” market groups. financial and parts of real estate capturing interest.
“In our conversations with consultants, [they’re] I’m looking for somewhere else to go and I’m starting to get nervous about it [Big Tech] valuations,” said the firm’s global head of ETFs.
CNBC’s Magnificent 7 Index, which includes Apple, Alphabet, Half, Microsoft, Amazon, Nvidia AND Tesla, rose nearly 6% on Friday. The index is up 68% over the past 52 weeks.
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