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In H1 2026, part of my 2026 framework was confirmed: AI‑driven productivity, industrial strength, and utilities' power‑demand tailwinds played out, while the Iran shock created the only major deviation from expectations. However, the macro backdrop is changing: Brent is back in contango, Warsh is firmly higher‑for‑longer, growth and labor remain resilient, and hyperscalers continue pushing toward trillion‑dollar cumulative AI capex.
If you own an ETF tracking the S&P 500 or the Nasdaq-100, the Magnificent Seven are unavoidable.
The Defiance Large Cap ex-Mag 7 ETF (NASDAQ:XMAG) and the Roundhill Magnificent Seven ETF (NASDAQ:MAGS) are photographic negatives of one another.
XMAG has overtaken both RSP and the Mag-7 since May 2026, reversing the first four months of the year when the equal-weight index was leading the breadth rotation trade. Beneath the 2026 outperformance, XMAG's top holdings have shifted dramatically in just one month. Understanding which names are climbing is the first step to evaluating this ETF. In this article, I explore the central paradox of XMAG: an ETF engineered to reduce Mag-7 exposure whose outperformance may owe more to those same seven companies than its construction.
Passive index investing has a concentration problem. The seven largest technology companies now account for roughly 35% of the S&P 500, which means owning a standard index fund today is less “broad market” and more “bet heavily on a handful of AI-driven mega-caps.
Stripping the Magnificent 7 from the
Defiance Large Cap ex-Mag 7 ETF (NASDAQ: XMAG - Get Free Report) fell 0.2% on Friday. The company traded as low as $22.30 and last traded at $22.37. 19,153 shares traded hands during mid-day trading, a decline of 77% from the average session volume of 84,048 shares. The stock had previously closed at $22.41. Defiance
There's a major market rotation going on from big tech to the rest of the market.
SEC filings for XMAG aren't indexed yet — common for recently launched funds. Browse the issuer's filings on SEC EDGAR directly.