BlackRock Plans New ETFs to Ride — Or Dodge — Biggest Tech Firms

ETF Developments

During the first-half rally, many strategies tied to the big-tech behemoths became popular with investors. For instance, the Roundhill Magnificent Seven ETF (ticker MAGS) posted healthy inflows, said Todd Sohn, an ETF strategist at Strategas.

Assets in the fund, which gives exposure to the seven largest companies, have grown to around $600 million from $35 million at the start of the year.

“It seems like issuers are either a) leaning into the concentration aspect or b) attempting to provide solutions away from it, and iShares, just being the leader in ETFs, is there to provide whatever solution investors want,” said Sohn, referring to BlackRock’s ETF unit.

Apart from MAGS, other exchange-traded products offer variations on big-tech exposure.

The Direxion Daily Concentrated Qs Bull 2X Shares (QQQU) and the Direxion Daily Concentrated QS Bear 1x Shares (QQQD) offer leveraged and inverse performance of an index tracking the Magnificent Seven, while two exchange-traded notes from REX Shares offer exposure to the NYSE FANG+ Index.

Invesco, meanwhile, has a S&P 500 Top 50 ETF that’s gotten inflows of $1.3 billion this year.

Although there are already products out there tapping into the big-tech theme, there’s still room for new iterations, said Dave Mazza, chief executive officer at Roundhill Investments, which runs MAGS.

“Anytime you see the success of a product, other fund providers look to see how they can enter the space,” he said. “Being precise is beneficial, but there’s space for people looking for different measures of precision.”

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