For nicely below $100, you should purchase one share of this under-the-radar AI exchange-traded fund (ETF) that appears poised to proceed to outperform the market.
For this text, I requested myself: The place would I begin investing if I had lower than $100 to speculate?
Picture supply: Getty Photos.
An AI ETF that is concentrated and filled with main and worthwhile corporations
This reply to my query popped into my head: I might need a concentrated exchange-traded fund (ETF) centered on main and worthwhile corporations closely concerned in synthetic intelligence (AI), however with sufficient variations amongst themselves.
Why an ETF? As a result of I might not wish to put all my (investing) eggs in a single basket.
Why AI? As a result of it is poised to be the most important secular development in lots of many years and even generations.
Why concentrated? As a result of I imagine if buyers are going to purchase a really diversified ETF, they may as nicely purchase your complete market, so to talk, and purchase an S&P 500 index ETF. Certainly, shopping for an S&P 500 index fund is a good suggestion for a lot of buyers, and really useful by investing legend Warren Buffett. That mentioned, over the long term, I believe an AI ETF filled with solely main and worthwhile corporations will beat the S&P 500 index.
Roundhill Magnificent Seven ETF (MAGS): Overview
And bingo! There may be such an ETF — the Roundhill Magnificent Seven ETF (MAGS 1.83%). It has seven holdings — the so-called “Magnificent Seven” shares: Alphabet (GOOG 4.38%) (GOOGL 4.53%), Amazon (AMZN 1.42%), Apple (AAPL 1.06%), Meta Platforms (META 1.18%), Microsoft (MSFT 1.01%), Nvidia (NVDA -0.10%), and Tesla (TSLA 3.54%). This ETF closed at $62.93 per share on Friday, Sept. 12.
These megacap shares (shares with market caps over $200 billion) got the Magnificent Seven identify a few years in the past by a Wall Avenue analyst on account of their robust development and huge affect on the general market. The identify comes from the title of a 1960 Western movie.
Two different essential traits I like about this ETF:
- Its expense ratio is cheap at 0.29%.
- It gives equal-weight publicity to the seven shares. At every quarterly rebalancing, the shares might be reset to an equal weighting of about 14.28% (100% divided by 7).
Since its inception in April 2023 (virtually 2.5 years), the Roundhill Magnificent Seven ETF has returned 160% — 2.4 instances the S&P 500’s 65.9% return.
Roundhill Magnificent Seven ETF (MAGS): All inventory holdings
Shares are listed so as of present weight in portfolio. Remember the ETF is rebalanced quarterly to make shares equally weighted.
Holding No.
Firm
Market Cap
Wall Avenue’s Projected Annualized EPS Progress Over Subsequent 5 Years
Weight (% of Portfolio)
1 Yr/ 10-Yr Returns
1
Alphabet
$2.9 trillion
14.7%
17.72%
55.9% / 677%
2
Nvidia
$4.3 trillion
34.9%
15.00%
49.3% / 32,210%
3
Apple
$3.5 trillion
8.8%
14.13%
5.6% / 812%
4
Tesla
$1.3 trillion
13.4%
13.81%
72.3% / 2,270%
5
Amazon
$2.4 trillion
18.6%
13.30%
22% / 762%
6
Meta Platforms
$1.9 trillion
12.9%
13.16%
44.3% / 725%
7
Microsoft
$3.8 trillion
16.6%
12.76%
20.3% / 1,250%
Total ETF
N/A
Whole web belongings of $2.86 billion
N/A
100%
40.5% / N/A
N/A
S&P 500
N/A
N/A
N/A
19.2% / 300%
Information sources: Roundhill Magnificent Seven ETF, finviz.com, and YCharts. EPS = earnings per share. Information as of Sept. 12, 2025.
All these corporations are worthwhile leaders of their core markets, and closely concerned in AI. Nvidia produces AI tech that permits others to make use of AI, whereas the opposite corporations primarily use AI to enhance their current merchandise and develop new ones.
Alphabet’s Google is the world chief in web search. Its cloud computing enterprise is No. 3 on the planet, behind Amazon Internet Providers (AWS) and Microsoft Azure. The corporate additionally has different companies, notably its driverless automobile subsidiary, Waymo. (You may learn right here why I imagine Nvidia is one of the best driverless automobile inventory.)
Nvidia is usually described because the world’s main maker of AI chips — and that it’s. However it’s far more. It is the world chief in supplying expertise infrastructure for enabling AI. It is also the worldwide chief in graphics processing items (GPUs) for pc gaming.
Apple’s iPhone holds the No. 2 spot within the world smartphone market, behind Samsung. Nevertheless, it dominates the U.S. market. The corporate’s companies enterprise is enticing, because it consists of recurring income and has been steadily rising.
Amazon operates the world’s No. 1 e-commerce enterprise and the world’s No. 1 cloud computing enterprise. It additionally has many different companies, notably its Contemporary and Amazon Prime Now (Complete Meals) grocery supply operations.
Meta Platforms operates the world’s main social media web site, Fb, in addition to Instagram, Threads, and messaging app WhatsApp.
Microsoft’s Phrase has lengthy been the world’s main phrase processing software program. Phrase is a part of Microsoft Workplace, a set of common software program for private computer systems (PCs). Its Azure is the world’s second-largest cloud computing enterprise.
Tesla stays the No. 1 electrical automobile (EV) maker, by far, within the U.S. regardless of struggling not too long ago. Within the first half of 2025, China’s BYD surpassed Tesla because the world’s chief in all-electric automobiles by variety of items bought. CEO Elon Musk touts that the corporate’s robotaxi and Optimus humanoid robotic companies will ultimately be bigger than its EV gross sales enterprise.
In brief, the Roundhill Magnificent Seven ETF is poised to proceed to learn from the expansion of synthetic intelligence. Technically, it does not have a long-term historical past. But when it had existed a few years in the past, it is easy to inform that its long-term efficiency could be very robust as a result of the long-term performances of all its holdings have been anyplace from nice to spectacular.
Beth McKenna has positions in Nvidia. The Motley Idiot has positions in and recommends Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Idiot recommends BYD Firm and recommends the next choices: lengthy January 2026 $395 calls on Microsoft and quick January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
