Invest In Magnificent 7 Stocks Without Breaking The Bank

KLCI market outlook 2023

AI has taken over the world by storm. From ChatGPT and Midjourney to the now thousands of deep learning and large language models, AI is every tech CEO’s new favorite buzzword, sending investors throwing their money at anything remotely resembling technology linked stocks.

For investors, it’s the most exciting development since the dot com bubble and in the eye of this storm, there are seven big tech companies — the biggest beneficiaries of this modern revolution. Enter the Magnificent 7.

What are the “Magnificent 7” stocks?

Also known as Mag 7 stocks, these companies earned their place in this exclusive group due to their strong performance and ability to power indexes higher, shaping the financial landscape around them like a black hole warping space-time. You probably even use several of these brands every day!

This elite group, each a giant in its own industry, combines to create an unstoppable force in the stock market. They are the crème de la crème of the business world. They include:

Image Source: Rakuten Trade Malaysia

They provide immense value to our way of life and as a result, their stocks have been delivering stellar returns. But with 6/7 of these companies now valued at over USD1 trillion, their share price has soared out of reach for many investors like you and me.

Here’s a savvy, wallet-friendly way to invest in your future while reducing your risks: ETFs.

What are ETFs?

ETFs, short for Exchange-Traded Funds, are like a sampler platter of stocks. Instead of trading individual stocks, you get a little taste of a bunch of them all on a single plate. They trade on the stock exchange just like regular stocks, so you can buy and sell them anytime during the trading day. Plus, they’re a smart move for spreading out your investments and reducing risk since they cover multiple stocks.

But there’s a catch.

Some ETFs stick to big-name stocks only. Missing out on smaller companies means you might be missing out on some serious growth potential.

ETFs with Mag 7 stocks

If you’re up for catching the Mag 7 wave, here are some ETFs to have your eye on:

1. Roundhill Magnificent Seven ETF (MAGS)

A Mag 7 fan club, this ETF is designed specifically to give you full exposure to these powerhouses. It’s a one-stop-shop for those looking to invest directly in these seven market leaders without the hassle of managing individual stock purchases.

2. Vanguard Mega Cap Growth ETF (MGK)

If 100% exposure in Mag 7 stocks is too rich for your blood, how about an ETF with just a little over 50% exposure instead? MGK provides a convenient way to get diversified exposure to the largest growth stocks in the U.S. market, in addition to our star-studded Mag 7 stocks. With around 57% exposure to the Magnificent 7, MGK is an excellent choice for those who believe in the long-term growth potential of these industry leaders.

3. Vanguard S&P 500 ETF (VOO)

VOO is one of the most popular ETFs in the world (and on Rakuten Trade). It tracks the S&P 500 index, which includes 500 of the largest companies in the US and with the Mag 7 representing the key players in this index, investing in VOO means that you’re indirectly gaining exposure to these heavyweights.

4. Vanguard Total Stock Market Index Fund ETF (VTI)

VTI gives you a ticket to the entire U.S. stock market, from the smallest micro-cap stocks to the largest mega-caps. With Mag 7 being some of the biggest fish in the pond, VTI ensures you have a nice chunk of your investment in these high-flyers while also spreading your bets across thousands of other companies. Not forgetting VTI pays out dividends every 3 months!

If you’re all in on the Mag 7 stocks, consider the MAGS ETF for a direct hit or the all-around VTI for broader coverage. There’s an ETF out there to match your investing vibe.

For a limited time: Start trading on NYSE/NASDAQ in fractions or whole units and as a cherry on top: on your first trade, Rakuten Trade will hook you up with RM20 TNG credit!* Offers ends 30 June. No other strings attached!
This article is contributed by Neale Gomez for Rakuten Trade.

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