According to Todd Rosenbluth of VettaFi, the market domination of Big Tech may induce an increase in the number of investors who invest in exchange-traded funds with similar weight.
The head of research for the company stated earlier this week on CNBC's "ETF Edge" that investors are becoming increasingly concerned about the fact that an excessive amount of money is concentrated in a small number of companies inside the larger exchange-traded funds (ETFs) that they offer and that are linked to the S&P 500 or even the Nasdaq 100.
The Invesco S&P 500 Equal Weight ETF and the Invesco S&P 500 Equal Weight Technology ETF are two options that Rosenbluth recommends to investors who are looking to lessen their exposure to the "Magnificent Seven."
You are the owner of the same companies that are included in the S&P 500 or that are in the technology sector. On the other hand, rather than being dominated by Apple, Microsoft, and Nvidia, you distribute that risk among the other companies, according to Rosenbluth.
The flows of capital into the Magnificent Seven have been slow so far this year, according to Ben Slavin of BNY Mellon, who made this observation in advance of this week's earnings from five of the Magnificent Seven businesses.
While this was going on, he discovered that "less-loved" market categories, such as financials and certain aspects of real estate, were attracting interest.
It was said by the global head of ETFs for the company that "in our conversations with advisors, [they are] looking for somewhere else to go and are starting to get nervous based on [Big Tech] valuations."
The Magnificent 7 Index, which is compiled by CNBC and includes companies such as Apple, Alphabet, Meta, Microsoft, Amazon, Nvidia, and Tesla, experienced a nearly 6% increase on Friday. Over the past 52 weeks, the index has increased by 68 percent.
Follow for more updates