Defiance Launches New ETF Tracking BITA’s US 500 Ex-Magnificent 7 Index
[October 22, 2024] – Defiance ETFs, a leading innovator in the ETF space, today announced the launch of the Defiance Large Cap Ex-Magnificent Seven ETF (XMAG). This first-of-its-kind fund provides investors broad exposure to the US stock market while strategically excluding the “Magnificent 7” tech giants, including Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla. The ETF is licensed to track BITA’s US 500 Ex-Magnificent 7 Index, which focuses on the top 493 companies in the US market, offering a more diversified approach to equity investing.
As the “Magnificent 7” have come to dominate many portfolios and indexes, some investors have grown concerned about overconcentration in their holdings. XMAG addresses these concerns by delivering broad market exposure while reducing the heavy weight of these dominant tech stocks. The fund allows investors to gain access to high-growth sectors and companies without the outsized influence of the top tech players, creating a more balanced investment strategy.
“We’ve heard loud and clear from institutional investors and advisors that they’re increasingly concerned about their substantial exposure to the Magnificent 7,” said Sylvia Jablonski, CEO and CIO of Defiance ETFs. “Even those who believe in the long-term growth of these companies are looking for a solution to mitigate the concentration risk in their portfolios. XMAG offers a streamlined, efficient way to maintain diversified exposure to the US 500 while selectively excluding these top seven companies. We’re excited to see how the market responds to this innovative approach.”
BITA’s US 500 Ex-Magnificent 7 Index is designed to provide a comprehensive representation of the US equity market, including 493 of the largest publicly traded securities, while specifically excluding the seven largest technology companies. This approach helps reduce overconcentration risk, creating a more diversified and balanced portfolio. The index is weighted based on free-float market capitalization and rebalanced quarterly, ensuring it remains reflective of the evolving market landscape.
Victor Hugo Gomez, CEO of BITA, comments:
“The Defiance Large Cap Ex-Magnificent Seven ETF, which tracks our US 500 Ex-Magnificent 7 Index, provides diversified exposure to US Large Capitalization Companies while avoiding the risks associated with extreme concentration. By excluding the so-called "Magnificent 7 stocks", the ETF can co-exist in multi-strategy portfolios alongside other exposures like thematics, where those companies are omnipresent. We’re excited to partner with Defiance to bring this extremely relevant product to market and offer investors a better toolkit for diversification.”
About Defiance ETFs
Founded in 2018, Defiance is at the forefront of ETF innovation. The company provides investors with leveraged single-stock ETFs and other unique ETF products, empowering them to take amplified positions in high-growth companies without the need to open a margin account.
About BITA
BITA is a leading technology-enabled Fintech, focused on the provision of investment customization infrastructure and indexing solutions to financial institutions across a variety of market segments and applications. From traditional passive investing to direct indexing, BITA’s infrastructure has been designed to support investment customization at scale.
BITACore is BITA’s cloud-based index development and investment customization platform. BITACore is available both in a web-based version as well as APIs, and can support a variety of applications, from traditional institutional indexing to direct indexing.