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🔍

Under the Hood

How the Magnificent 7 dominates the S&P 500 — and how MAGS & XMAG reveal what's really happening in the market

S&P 500
SPX
The Index
Mag 7 Only
MAGS
The Leaders
The Other 493
XMAG
The Rest
↓
02 / 07
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7 Stocks. One Third of the Index.

The S&P 500 is market-cap weighted — bigger companies get a bigger share. Today, just 7 companies make up ~34% of the entire index.

34%
Mag 7 Weight
Magnificent 7 ~34%
Other 493 Stocks ~66%

Why this matters: When you own the S&P 500, over a third of your money is in just 7 stocks. Your returns are heavily driven by these mega-caps.

03 / 07
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The Magnificent 7 Breakdown

Each stock's approximate weight in the S&P 500 — September 2026

NVDA
~8%
AAPL
~7%
GOOGL
~6%
MSFT
~5%
AMZN
~4%
META
~3%
TSLA
~2%
Combined Weight ≈ 34%
💡 In 2018, these same 7 stocks were only ~13% of the S&P 500. Their weight has nearly tripled.
04 / 07
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MAGS vs XMAG

Two ETFs that let you see the S&P 500 split in two

MAGS
XMAG
Full Name Roundhill Magnificent Seven ETF Defiance Large Cap Ex-Mag 7 ETF
What It Holds Only the Mag 7 The Other ~493 Stocks
Weighting Equal-weight (~14% each) Market-cap weighted
Number of Holdings 7 ~493
Rebalancing Quarterly Quarterly
Think of It As… 🚀 The Engine 🏗️ The Foundation
🧩 Together, MAGS + XMAG ≈ the entire S&P 500
By watching both, you can see whether the index is being pulled up by the mega-caps or lifted by the broader market.
05 / 07
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A Real-World Example

SPX, MAGS, and XMAG side-by-side — September 23, 2026. Notice the relative strength indicators at the bottom of each panel.

SPX, MAGS, and XMAG comparison chart — September 2026
SPX 7,701
THE INDEX
Near highs — looks healthy on the surface
MAGS 72.04
⬆ LEADER
RS vs SPX shows leadership — Mag 7 pulling the index higher
XMAG 25.74
⬇ LAGGARD
RS vs SPX shows underperformance — the "other 493" trailing
🔎 As of 9/23/2026: MAGS is a Leader while XMAG is a Laggard. The S&P 500 is being pulled up primarily by the Mag 7 — the broader market isn't fully participating.
06 / 07
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Reading the Signals

Four scenarios that tell you what's happening under the hood

Healthy Bull Market
MAGS ↑ & XMAG ↑
Both mega-caps and the broader market are rising together. Strong breadth. The entire market is participating — this is the best scenario for sustained uptrends.
🟢 Strong Breadth 📈 Broad Rally
Narrow Leadership
MAGS ↑ & XMAG ↓
The Mag 7 is carrying the index while the other 493 stocks struggle. The S&P looks fine on the surface, but participation is thin. This is a warning sign.
⚠️ Narrow Breadth 🎭 Mask Rally
Rotation Underway
MAGS ↓ & XMAG ↑
Money is leaving the mega-caps and flowing into the broader market. The index may look flat or down, but participation is actually improving — a potential opportunity.
🔄 Rotation 🔍 Hidden Strength
Broad Weakness
MAGS ↓ & XMAG ↓
Everything is selling off. Risk-off environment across the board. No safe haven within equities — defensive positioning may be appropriate.
🔴 Risk Off 📉 Broad Decline
07 / 07
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The Concentration Has Tripled

Mag 7 weight in the S&P 500 over time

13%
2018
20%
2020
24%
2022
28.5%
2023
33%
2024
33.5%
2025
34%
2026
🏔️
The S&P 500 isn't 500 equal stocks. It's a Mag 7 story.
Watching MAGS vs XMAG gives you the real picture of what's happening under the hood.
Peak Horizons Capital · Educational Purposes Only · Not Investment Advice
© 2026 Peak Horizons Capital · For Educational Purposes Only · Not a Recommendation to Buy or Sell Any Security