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The “Magnificent Seven” megacap tech stocks have seen a remarkable 98% increase over the past two years, significantly outperforming the S&P 500, which gained 46% in the same period. Collectively, these stocks account for approximately 34% of the market-cap weighted S&P 500 index and each has a market cap exceeding $1 trillion.
Among key investments, the Vanguard Mega Cap Growth ETF (NYSEMKT: MGK) tracks the US Mega Cap Growth Index and has over $28 billion in assets under management. The ETF has risen nearly 14% year-to-date and approximately 31% over the past 52 weeks. Its top four holdings include Nvidia (14.5%), Microsoft (14%), Apple (11%), and Amazon (7.7%). The ETF has a low expense ratio of 0.07%, which is significantly below the average of 0.93% for similar funds.
Investors are encouraged to diversify their portfolios by considering not only the Magnificent Seven but also emerging stocks likely to challenge their dominance, following historical trends where such shifts regularly occur.
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