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Bubble fears siphon ETF flows away from Magnificent Seven

Funds that equal weight the S&P 500 had record inflows in 2023 even though investors lost out as the titans grew
The Magnificent Seven are trading at 27 times 12-month forward forecast earnings, while everything else is cheap or in line with average, one analyst noted

Investors are pushing back against the dominance of the “Magnificent Seven” by increasingly looking for alternatives that downplay the power of the US tech elite as concerns grow of a possible bubble.

Funds that equal weight the S&P 500 index — buying the same amount of every stock irrespective of its size — saw record inflows last year, even though this approach hit investors in the pocket as the tech titans entrenched their ascendancy.

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