XMAG ETF Outperforms S&P 500 Amid Magnificent Seven Weakness

The Defiance Large Cap ex-Mag 7 ETF (XMAG) has emerged as a top performer in 2026, outpacing both the S&P 500 and the Roundhill Magnificent Seven ETF (MAGS). XMAG has delivered a 15.95% year-to-date return, compared to the S&P 500's 13.39% gain and MAGS's 4.82%. This performance is attributed to XMAG's strategy of excluding the dominant mega-cap technology stocks, which have been hampered by individual stock weaknesses.

The MAGS ETF, designed to offer equal-weighted exposure to the seven largest tech companies, has suffered from Tesla's 26.94% year-to-date decline. Structurally, MAGS holds a substantial portion of its assets in Treasury bills and derivatives, with only 34.11% in direct equity positions as of March 31, 2026. In contrast, XMAG tracks the BITA US 500 ex-Magnificent 7 Index, holding broader S&P 500 components outside the seven mega-caps. As of May 31, 2026, XMAG's top holdings included Broadcom (4.78%), Micron (2.51%), and Eli Lilly (2.16%), reflecting a focus on semiconductor and AI infrastructure suppliers alongside other market sectors.