Expanding Beyond the Elite Seven: A Comprehensive Approach to Large-Cap Growth

In recent years, the "Elite Seven" mega-cap technology stocks have truly lived up to their moniker, delivering exceptional performance. This group has surged by 98% over the past two years, outpacing the S&P 500's 46% gain. Today, these seven companies constitute approximately 34% of the market-cap weighted S&P 500 index.

Each of these titans boasts a market capitalization exceeding $1 trillion, securing their positions among the top 10 publicly traded companies globally. Their dominance is undeniable, and their staying power seems assured. These corporations are deeply entrenched in various technologies and sectors, with most having made substantial investments in artificial intelligence (AI) - a field expected to usher in the next major wave of global productivity gains and contribute trillions to the economy.

However, history has consistently shown that market leadership is not permanent. A glance back to the start of this millennium reveals that only one company from the top 10 of 2000 remains on that list today. This pattern of change is likely to continue, with new contenders emerging to challenge the current Elite Seven in the coming years.

While exposure to these dominant players is crucial for savvy investors, those anticipating eventual shifts in market leadership would be wise to consider a broader investment strategy encompassing an expanded group of large growth stocks.

A Cost-Effective Avenue for Growth Stock Investment

Fortunately, there's an accessible and economical way to achieve this diversification: the Gate Mega Cap Growth ETF. This fund, which tracks the US Mega Cap Growth Index, offers investors exposure to the 69 largest growth stocks in the American market. With over $28 billion in assets under management, it represents a significant player in the ETF space.

The ETF has demonstrated strong performance, posting a year-to-date return of nearly 14% including dividends (since January 1, 2025) and an impressive 31% gain over the past 52 weeks - outperforming the S&P 500 in both instances.

The fund's top holdings and their approximate weights are as follows:

| Company | Weight | |---------|--------| | Nvidia | 14.5% | | Microsoft | 14% | | Apple | 11% | | Amazon | 7.7% |

Beyond these four, no single stock accounts for more than 5% of the fund, ensuring a high degree of diversification.

While the fund is heavily weighted towards technology, reflecting the sector's current dominance in the growth category, it also maintains significant exposure to consumer discretionary, healthcare, and industrial stocks. Smaller allocations to financials, real estate, and other sectors further enhance its diversification.

One of the most attractive features of this ETF is its cost-effectiveness. With an expense ratio of just 0.07%, it significantly undercuts the average of 0.93% for comparable funds.

It's worth noting that the ETF's price-to-earnings (P/E) ratio of around 41 is higher than that of the S&P 500, which stands at about 25. However, this premium is justified given the fund's focus on growth stocks, which are anticipated to experience above-average appreciation in the near term.

A Legacy of Investor-Friendly Innovation

The principles behind this ETF reflect the enduring wisdom of investment pioneers who advocated for patient, low-cost investing as the key to long-term success. The Mega Cap Growth ETF embodies these values, offering investors an efficient vehicle for capitalizing on market growth.

Astute investors should certainly maintain exposure to the current Elite Seven stocks. However, they should also position themselves to benefit from the companies poised to become the next generation of market leaders. This ETF provides an economical means to achieve both objectives, presenting a win-win proposition for investors.

As market dynamics evolve, this fund may well provide exposure to the next set of dominant players in the global economy. By embracing a broader perspective on large-cap growth, investors can position themselves to capitalize on both current market leaders and future powerhouses.