BlackRock's iShares is trying to attract investors who want to diversify beyond the so-called Magnificent Seven.
The company launched the iShares Top 20 US Equity ETF (TOPT) this month. It doesn't just contain the Great Seven – apple, Amazon, dead, alphabet, Microsoft, Nvidia and Tesla. It is made up of the 20 largest US stocks by market capitalization.
“What iShares is designed to build ETFs to do is provide a toolkit of simple solutions for investors to be able to capture the growth of some of the largest companies in the U.S. stock market today, but to do so on a broader scale and in a more diversified way,” said Rachel Aguirre of the company. BlackRock to “ETF Edge” on CNBC on Monday.
Aguirre, head of the company's US iShares products, noted that the ETF's mission is to offer an easy and accessible way to profit from the innovations of giant companies — “whether it's in the tech-heavy sector.” Nasdaq Space or, more broadly, within the S&P 500.”
ETFs, according to Aguirre, provide an avenue for investors concerned about the concentration of Magnificent Seven shares in the S&P 500.
On Thursday, Magnificent Seven shares fell more than 3.5% as a group, losing about $615 billion in market value. This is equivalent to volume JPMorgan Chase.
However, Seven Wonders is still up about 43% year to date instead Standard & Poor's 500 up to about 20%
“It is important for clients and investors to remember that there are divided views on this topic,” Aguirre said. “There are many investors who believe that large companies will get bigger and that winners will continue to win.” “There is also another side to this argument. There are many investors who believe that now is a very worrying time to continue investing in…large-cap companies just because of their high valuations.”
The iShares Top 20 US Equity ETF is down 2% since its launch on October 23.
