XMAG Is Outperforming the S&P 500 in 2026 as the Magnificent Seven Stall

Quick Read

• XMAG has returned 16% YTD versus MAGS's 5%, with Tesla's 27% diminution dragging down the equal-weighted Mag 7 basket.

• MAGS holds lone 34% of nett assets successful existent equities, with 53% parked successful Treasury bills and the remainder successful swap derivatives.

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The Roundhill Magnificent Seven ETF (CBOE:MAGS) was designed to supply investors with clean, equal-weighted vulnerability to the 7 mega-caps that drove the S&P 500 higher for astir of the past 3 years. Since its April 11, 2023 launch, MAGS has done precisely that, returning 190.29% done August 7, 2026.

Holders bought it for that exposure, and it delivered. 2026 has been a antithetic story. MAGS is up 4.82% year-to-date, trailing the S&P 500 and getting outrun by a money built to beryllium its opposite: the Defiance Large Cap ex-Mag 7 ETF (NASDAQ:XMAG).

Why the Concentrated Bet Is Slipping

The show spread this twelvemonth is wide. XMAG has returned 15.95% YTD, portion the SPDR S&P 500 ETF has returned 13.39%. MAGS trails both. The crushed sits wrong the fund's ain holdings. Tesla, 1 of the 7 equal-weighted names, is down 26.94% YTD. Microsoft is up conscionable 3.85%. When a handbasket owns each sanction astatine astir the aforesaid weight, a azygous laggard the size of Tesla drags connected the full vehicle.

Structurally, MAGS is antithetic for a money that astir investors presume is simply a consecutive equity basket. The March 31, 2026 NPORT filing shows the 7 Mag 7 equity positions accounting for lone 34.11% of nett assets. Treasury bills beryllium astatine 52.67%, a Roundhill ultra-short-duration ETF holds different 8.97%, and nett derivative positions full astir $113.2 million.

The vulnerability is delivered done cash-collateralized swaps, which means the fund's returns beryllium connected some the underlying stocks and the pricing of those swap contracts.

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What XMAG Actually Owns

The BITA US 500 ex-Magnificent 7 Index is what XMAG tracks, with an disbursal ratio of 0.35% and astir $175.40 cardinal successful assets. The money owns the remaining S&P 500 scale shares outright. As of May 31, 2026, the apical presumption is Broadcom astatine 4.78%, followed by Micron astatine 2.51%, Eli Lilly astatine 2.16%, AMD astatine 1.93%, and JPMorgan Chase astatine 1.85%.