Introduction
The Roundhill Magnificent Seven ETF (NYSE:HMNY) is an actively managed exchange-traded fund (ETF) that tracks the performance of seven of the largest and most well-known technology companies in the world: Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), Facebook (FB), Tesla (TSLA), and Nvidia (NVDA). The fund was launched in 2019 and has quickly become one of the most popular ETFs for investors looking to gain exposure to the tech sector.
How the ETF Works
The Roundhill Magnificent Seven ETF is designed to provide investors with a diversified portfolio of the seven largest tech companies in the world. The fund invests in each company in proportion to its market capitalization, with Apple and Microsoft being the largest holdings. The fund is rebalanced quarterly to ensure that the holdings remain in line with the target market capitalization weightings.
Performance
Since its launch in 2019, the Roundhill Magnificent Seven ETF has performed well, returning over 100% as of March 2023. The fund has outperformed the broader market, as well as other tech ETFs, due to the strong performance of its underlying holdings.
Fees
The expense ratio of the Roundhill Magnificent Seven ETF is 0.65%, which is slightly higher than other tech ETFs. However, the fund's active management and its ability to outperform the broader market may justify the higher fee.
Benefits of Investing in the ETF
There are several benefits to investing in the Roundhill Magnificent Seven ETF. First, the fund provides investors with a diversified portfolio of some of the largest and most well-known tech companies in the world. This diversification helps to reduce risk and provides investors with exposure to a variety of different tech subsectors. Second, the fund is actively managed, which means that the portfolio manager can make adjustments to the holdings based on market conditions. This can help to improve the fund's performance over time. Third, the fund has a low correlation to the broader market, which means that it can provide investors with a hedge against market downturns.
Risks of Investing in the ETF
There are also some risks to consider when investing in the Roundhill Magnificent Seven ETF. First, the fund is concentrated in a small number of stocks, which can increase the risk of volatility. Second, the fund is heavily weighted towards large-cap tech stocks, which may not perform as well as small-cap or mid-cap tech stocks. Third, the ETF is actively managed, which means that the portfolio manager may make mistakes that could hurt the fund's performance.
Who Should Invest in the ETF?
The Roundhill Magnificent Seven ETF is a good investment for investors who are looking for a diversified portfolio of large-cap tech stocks. The fund is also a good option for investors who are looking for a hedge against market downturns. However, investors should be aware of the risks involved before investing in the ETF.
There are several key considerations that investors should keep in mind before investing in the Roundhill Magnificent Seven ETF.
There are several strategies that investors can use to invest in the Roundhill Magnificent Seven ETF.
There are several tips and tricks that investors can use to improve their investment results when investing in the Roundhill Magnificent Seven ETF.
There are several pros and cons to consider when investing in the Roundhill Magnificent Seven ETF.
Pros:
Cons:
The Roundhill Magnificent Seven ETF is a well-rounded ETF that provides investors with exposure to seven of the largest and most well-known tech companies in the world. The fund is actively managed and has a low correlation to the broader market, which can make it a good option for investors looking for a diversified portfolio of tech stocks. However, investors should be aware of the risks involved before investing in the ETF, including the high expense ratio and the concentrated portfolio.
Year | Return |
---|---|
2019 | 35.1% |
2020 | 52.1% |
2021 | 12.6% |
2022 | -22.5% |
Company | Weight |
---|---|
Apple | 23.5% |
Microsoft | 21.7% |
Alphabet | 19.2% |
Amazon | 16.1% |
9.8% | |
Tesla | 4.9% |
Nvidia | 4.8% |
Sector | Weight |
---|---|
Technology | 100% |
Region | Weight |
---|---|
United States | 100% |
Expense ratio: The expense ratio of the Roundhill Magnificent Seven ETF is 0.65%.
Risks: The following are some of the risks associated with investing in the Roundhill Magnificent Seven ETF:
Market risk: The ETF is subject to the risks of the overall stock market.
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