Roundhill Magnificent Seven ETF Underperforms Small-Cap Growth
The Roundhill Magnificent Seven ETF (NYSEMKT: MAGS), which includes top tech stocks like Alphabet, Amazon, and Microsoft, has seen a year-to-date decline of 0.5% as of 2026, while the iShares Russell 2000 Growth ETF (NYSEMKT: IWO) has gained approximately 17%. Over the past three years, MAGS delivered an average annual return of 29.7%, but its performance has recently lagged, including a significant drop for key components like Meta Platforms (down 15.9%) and Microsoft (down 23.3%).
Conversely, the iShares Russell 2000 Growth ETF, holding 1,118 small-cap stocks, has achieved average annual returns of 18.3% over the same three-year period and 38.6% in the past year. Investing in this ETF may offer better diversification across various sectors, with healthcare constituting 30.02% of its holdings, compared to the concentrated risk of the Magnificent Seven stocks.
As investors weigh their options, analysts suggest that small-cap stocks may outperform large-cap stocks in the next decade, making the iShares Russell 2000 Growth ETF a potentially more favorable option for long-term growth.
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