Since the beginning of this year, the US stock market has shown a clear "top effect", with big cap stocks leading the market, and large cap ETFs focusing on them also being favored by investors.
Since the beginning of this year, the US stock market has shown a clear "head effect", with large-cap stocks leading the market. To follow this trend, US asset management giants have launched ETF products focusing on stocks of top companies to attract investors' attention.
Following BlackRock's application earlier this month, Invesco has also joined the fray with plans to launch a new fund called "Invesco Mega QQQ ETF" (QBIG), tracking the Nasdaq 100 Mega Index, which comprises the top 45%weighted companies.
Currently, the constituents of this index include top companies such as Apple, Microsoft, Nvidia, Amazon, Meta, Google parent company Alphabet, and Costco.
Strategas ETF strategist Todd Sohn said, "This fund caters to investors who only want to invest in top stocks of the index", but also warns of related risks, "Once these stocks underperform, investors will also face losses."
Since the beginning of this year, large-cap stocks in the US stock market have led the market and contributed to most of the gains this year. For example, Invesco's ETF, which tracks the top 50 stocks of the S&P 500 index, has a return rate that is 11 percentage points higher than the equal-weighted S&P 500 ETF.
Under this trend, some ETFs focusing on large-cap stocks have gained popularity among investors. For example, the assets under management of the Roundhill Magnificent 7 ETF (MAGS) have increased from $35 million at the beginning of the year to about $673 million.
This has also prompted more ETF "big players" to seek to catch up with this trend. Previously, BlackRock has submitted an application to launch funds that track the top 30 stocks of the Nasdaq 100 index and the top 20 stocks of the S&P 500 index.
Editor/Lambor