ASX ETFs or exchange-traded funds (ETFs) provide one of the easiest ways for Australian investors to gain exposure to the big US stocks without buying them directly on an international exchange.
But which ones have the best exposure to the newly-crowned ‘magnificent seven’?
Which US stocks are the magnificent seven?
US TV host Jim Cramer described seven tech stocks as the new market leaders of the S&P 500 Index (SP: .INX) on his Mad Money TV show on CNBC earlier this month.
They are Meta Platforms Inc (NASDAQ: META), Amazon.com, Inc. (NASDAQ: AMZN), Apple Inc (NASDAQ: AAPL), Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG), Nvidia Corp (NASDAQ: NVDA), Microsoft Corp (NASDAQ: MSFT), and Tesla Inc (NASDAQ: TSLA).
As reported by abc.net.au, these seven US stocks have recorded extraordinary growth and have collectively pushed the S&P 500 materially higher over the year so far.
As you can see below, the best performer among them is Nvidia, up 184% in the year to date.
Which ASX ETFs have exposure to the magnificent seven?
The first ASX ETF that comes to mind is Betashares Nasdaq 100 ETF (ASX: NDQ).
It’s up 40% in 2023 compared to a meagre 2.5% lift in the S&P/ASX 200 Index (ASX: XJO).
As we recently reported, the NDQ ETF was one of those ASX 200 shares that would have been an extremely smart ‘buy the dip‘ purchase at the start of the year. Live and learn, right?
Anyway, this ASX ETF has very good exposure to the magnificent seven by default. This is because the NDQ ETF simply tracks the 100 largest tech stocks on the NASDAQ.
This means investors are not relying on a fund manager to choose the weighting of the magnificent seven in this ASX ETF. The weighting automatically changes as each stock’s market capitalisation moves higher.
Here are the magnificent seven’s weightings in the NDQ ETF: Microsoft 12.9%, Apple 12.4%, Amazon 6.9%, Nividia 6.9%, Meta 4.2%, Tesla 4%, and Alphabet 7.5%.
You can check out the NDQ ETF’s entire portfolio and weightings here.
It’s worth noting that it’s not just tech-focused ASX ETFs that hold some or all of the magnificent seven.
An ASX ETF like BetaShares Global Sustainability Leaders ETF (ASX: ETHI) may not be an obvious option for investors seeking exposure to US tech stocks. But its no.1 holding is Nividia at 5.6%, and Apple is not far behind at 4.3%. Together, they make up almost 10% of the entire fund.
This raises another important point.
If you specifically want to invest in certain stocks via an ETF, they need to have sufficient weighting within the ETF to pull its share price materially higher over time.
So, you may want to favour ETFs that feature the magnificent seven in their top 10 holdings.
