The Surging Value of the Magnificent 7 Versus the S&P 500 (2014-2024)

Key Takeaways

-From the start of 2014 to the end of 2024, the S&P 500 delivered a total return of more than 220%.

-One group of stocks has stood out with exceptional performance: the “Magnificent 7.” This group is made up of Alphabet (Google), Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla.

-These tech-heavy giants now make up over one-third of the S&P 500, raising concerns about concentration risk within portfolios.

-The Tema S&P 500 Historical Weight ETF (DSPY) mirrors the S&P 500 while adjusting company weights to reflect their 35-year historical average levels. This strategy aims to provide investors with a more balanced approach to investing in the S&P 500.