How One ETF Provider is Trying to Help Investors Cut Exposure to Magnificent 7 Stocks

Big tech’s historic gains could be affected your portfolio’s makeup – especially if your goal is diversification.

Astoria Portfolio Advisors Ceo John Davi Warns The S & p 500 Index Tilts too far in favor of the so-called Magnificent Seven Stocks: Apple, Microsoft, Nvidia, Amazon, Meta Platforms, Alphabet and Tesla,

“That Mag Seven Stocks are very expensive right now,” Davi said told cnbc’s “Etf edge” This week. “You should rotate your portfolio, and rotate into other things beeside ‘Mag Seven’ Stocks.”

Davi Thinks he has a product to help long-term investors. His firm is behind the Astoria Us Equity Weight Quality Kings ETF (Roe)According to the Astoria website, it investment in 100 of the Highest Quality Us Large and Mid-Cap Stocks and Avoids “Concentration Risks Associated with Market-Cap Weighting.”

“Our marginal contribution to risk and return is a lot higher,” said davi.

As of jan. 31, The Top 10 Stocks in the S & P 500 Are Mostly Big Tech. They Accountted for About 36% of the Index, According to Factset.

In the astoria us equal weight quality kings etf, Each stock is weight is weighted Around 1%, according to factsset. Since the etf’s launch on July 31, 2023, the fund is up more than 26%. Meanwhile, The S & P 500 is up 32% in the same period.

Vettafi’s todd rogenbluth highlighted etf options beyond Astoria’s etf for investors looking to diversify.

“If you wanted a more quality growth or quality filter on the s & p 500, Invesco has an S&P 500 Quality ETF, SphqIf you wanted something that was more quality and growth and additional filters, American century has an etf. The Ticker is Qgro. This is an Etf that’s going to filter based on Quality and Growth characteristics and a few other ons, “The firm’s head of research said.