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Megacap tech gets new BlackRock ETF

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Mag 7, Plus: widening the winners' circle

 BlackRock’s iShares is trying to appeal to investors who want to diversify beyond from the so-called Magnificent Seven.

The firm launched the iShares Top 20 U.S. Stocks ETF (TOPT) this month. It doesn’t just hold the Magnificent Seven — Apple, Amazon, Meta, Alphabet, Microsoft, Nvidia and Tesla. It’s made up of the 20 largest U.S. stocks by market capitalization.

“What the iShares build ETFs are designed to do is to deliver a tool kit of simple solutions for investors to be able to capture the growth of some of the largest companies within the U.S. equity market today, but to do so in a broader and more diversified manner,” BlackRock’s Rachel Aguirre told CNBC’s “ETF Edge” on Monday.

Aguirre, the firm’s head of U.S. iShares product, noted the ETF’s mission is to deliver an easy and accessible way to tap into the innovation of megacaps – “whether that be in the tech-heavy Nasdaq space or, more broadly, within the S&P [500].”

The ETF, according to Aguirre, provides a way for investors worried about the concentration of the Magnificent Seven stocks in the S&P 500.

On Thursday, the Magnificent Seven slid more than 3.5% as a group — losing around $615 billion in market cap. That’s equivalent to the size of JPMorgan Chase.

However, the Magnificent Seven is still up about 43% so far year while the S&P 500 is up around 20%

“It’s important for clients and investors to remember that there are split views on this topic. There are many investors who believe that the big will get bigger [and] that the winners will continue to win,” Aguirre said. “There’s also another side to this argument. There are many investors who believe that it’s actually a very worrisome time to continue investing in… mega-cap companies because of just their high valuations.”

The iShares Top 20 U.S. Stocks ETF is down 2% since its Oct. 23 launch.

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gold etf optimism 20 years later

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20 years of the revolutionary GLD ETF

The founder of the first gold-tracking ETF is still bullish on the commodity two decades later.

“Things are looking good for the rest of this year and for next year,” George Milling-Stanley told CNBC’s “ETF Edge” this week.

The State Street chief gold strategist highlighted demand from both central banks and individual investors in emerging markets, such as India and China, as major tailwinds for the precious metal.

Even the postelection pullback in gold futures and the SPDR Gold Shares ETF (GLD) hasn’t tarnished the record run this year.

Since the Nov. 5 election, “investors have gone gung-ho on risk-on assets,” Milling-Stanley said. “This is why we’ve seen the stock market go up dramatically, why we’ve seen the cryptocurrencies go up dramatically.”

But the precious metal, and in turn, the GLD ETF, are “starting to claw back some of the lost ground,” Milling-Stanley said.

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GLD chart since inception

The launch of the GLD ETF changed the game for commodity ownership when it launched 20 years ago. 

Since then, investment in gold has shifted away from jewelry and into bullion and ETFs as demand for the precious metal has jumped. Milling-Stanley describes the increased investor demand as a “huge change” to the commodity investment landscape — and to portfolio management as a whole.

Todd Sohn, ETF and technical strategist at Strategas, says GLD brought more investors into gold because of the broader access ETFs can offer.

“No matter what your end game is, GLD allowed you to add something to your portfolio besides an equity and a fixed income instrument, so you can get diversification,” said Sohn.

Since its inception, GLD is up 451%. It is up 29% in 2024. 

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Citadel’s Ken Griffin says Trump’s tariffs could lead to crony capitalism

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Ken Griffin, chief executive officer and founder of Citadel Advisors LLC, speaks during an Economic Club of New York event in New York, US, on Thursday, Nov. 21, 2024.

Yuki Iwamura | Bloomberg | Getty Images

Citadel CEO Ken Griffin issued a warning against the steep tariffs President-elect Donald Trump vowed to implement, saying crony capitalism could be a consequence.

“I am gravely concerned that the rise of tariffs puts us on a slippery slope towards crony capitalism,” the billionaire investor said Thursday at the Economic Club of New York.

The Citadel founder thinks domestic companies could enjoy a short-term benefit of having their competitors taken away. Longer term, however, it does more harm to corporate America and the economy as companies lose competitiveness and productivity.

Crony capitalism is an economic system marked by close, mutually advantageous relationships between business leaders and government officials.

“Those same companies that enjoy that momentary sugar rush of having their competitors removed from the battlefield, soon become complacent, soon take for granted their newfound economic superiority, and frankly, they become less competitive on both the world stage and less competitive at meeting the needs of the American consumer,” Griffin said at the event.

Trump made universal tariffs a core tenet of his economic campaign pitch, floating a 20% levy on all imports from all countries with a specifically harsh 60% rate for Chinese goods.

The protectionist trade policy could make production of goods more expensive and raise consumer prices, just as the world recovers from pandemic-era inflation spikes.

“Now you’re going to find the halls of Washington really filled with the special interest groups and the lobbyists as people look for continued higher and higher tariffs to keep away foreign competition, and to protect inefficient American businesses have failed to meet the needs of the American consumer,” Griffin said.

At the same event, Griffin also said that he’s not focused on taking Citadel Securities public in the foreseeable future. Citadel is a market maker founded by Griffin in 2002.

“We’re focused on building the business, on investing in our future. And we do believe that there are benefits to being private during this period of very, very rapid growth,” he said.

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Stocks making the biggest moves midday: NFLX, GOOGL, NVDA, BJ

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