The Magnificent Seven stocks have dominated markets in recent years but there are some concerns over whether they can continue their run or if now is the time to diversify.
With this in mind, Trustnet looked at the stocks not in the exclusive Magnificent Seven club that are most owned by IA North America funds.
Yesterday we looked at the number of IA North America funds with a top 10 position in the Magnificent Seven names. All these stocks are in the top 10 of the S&P 500, which inflated their numbers as more than 40% of the sector is made up of exchange-traded funds (ETFs).
The same is true of the top name on the below list – Broadcom, which is a bigger weighting in the index than both Meta and Tesla. It appears in the top 10 of 135 IA North America funds, or 47.7% of the peer group.
Like its other tech brethren, the company enjoyed strong recent results in the latest earnings season, which it kicked off in early March.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said at the time: “Broadcom’s first-quarter results were strong, driven by rising demand for AI chips, while the outlook and management’s commentary helped ease concerns around the demand trajectory.
“Orders are expected to build through the year and the added colour on ramping deals for 2027 should act as a catalyst for earnings expectations to move higher.”
More recently, Carolyn Bell is lead portfolio manager of the Stonehage Fleming Global Best Ideas Equity fund, wrote on Trustnet that the tech giant ticks all of the quality boxes.
“Broadcom has delivered strong shareholder returns over a number of years. We believe its diversified growth profile, backed by strong fundamentals and ability to capture accelerating structural AI tailwinds, remains compelling for long-term investors in quality companies,” she said.
| The most popular non-Magnificent Seven stocks among IA North America funds | ||
| Non-Magnificent Seven stocks | Total number of funds with a top 10 position | Percentage of sector with a top 10 weighting |
| Broadcom | 135 | 47.7% |
| JP Morgan | 69 | 24.4% |
| Eli Lilly | 45 | 15.9% |
| Visa | 45 | 15.9% |
| Berkshire Hathaway | 36 | 12.7% |
| Mastercard | 33 | 11.7% |
| Exxon Mobil | 31 | 11.0% |
| Johnson & Johnson | 29 | 10.2% |
| Cisco | 22 | 7.8% |
| Walmart | 20 | 7.1% |
Source: Trustnet
Outside of the big tech names, Warren Buffett’s Berkshire Hathaway is the 10th largest stock in the index, but it is not the most popular option among the rest. This implies that it is not as fancied by active managers, as it will populate passive funds by force.
The next most-bought is JP Morgan, which is backed by 69 funds, with very few passives including the US banking group in their top 10.
It is the largest holding in the SSGA State Street SPDR S&P U.S. Financials Select Sector UCITS ETF and iShares S&P 500 Financials Sector UCITS ETF, at 11.4% and 11.3% respectively, but active fund Royal London US Equity Trust is third with a 5.4% holding.
Pharmaceutical company Eli Lilly is next. Danni Hewson, AJ Bell head of financial analysis, noted that the firm was the “standout performer” among the healthcare names in the latest earnings updates, with demand for its products such as its its weight-loss drug compensating pricing pressures.
“The market for weight-loss jabs is growing and set to grow further and, coupled with demand for diabetes drug Mounjaro, the company saw sales beat estimates by more than $1bn over the quarter,” she said.
Eli Lilly takes up 14.1% of the State Street SPDR S&P U.S. Health Care Select Sector UCITS ETF, but the remainder of its biggest backers are active funds.
Lazard US Equity Concentrated, New Capital US Growth, Capital Group AMCAP Fund and Artemis US Select all have more than 4% in the healthcare stock.
It sits alongside payments provider Visa, with both being top 10 holdings in 45 funds, or 15.9% of the peer group. Like Eli Lilly, the funds with the largest weightings are specialist financial trackers, while the active fund with the biggest stake in the firm is WS Lindsell Train North American Equity with 6.6%.
In fifth place is Berkshire Hathaway, with 36 funds including the stock in their top 10 holdings, while rival payment provider to Visa – Mastercard – is in sixth, appearing in 33 top-10 lists.
Mastercard is one of only two stocks on the list where its largest backers are not specialist ETFs. The fund with the largest weighting to the financials giant is SVS AllianceBernstein Concentrated US Equity with a 9.5% position.
Oil major Exxon Mobil is next up, sitting in the top 10 of 31 funds. It hits a lot of different boxes among specialist ETFs, sitting in the top 10 of energy and income trackers, as well as active funds.
Consumer brand Johnson & Johnson is the only other stock where more than 10% of the peer group have a top 10 position, while Cisco and Walmart are the final stocks to appear in the top 10s of 20 or more portfolios.