BlackRock Inc. plans to put out a trio of exchange-traded funds that would allow investors to either go all-in on the biggest tech firms driving markets — or avoid them altogether.
The world's largest asset manager on Wednesday filed for the iShares Nasdaq Top 30 Stocks ETF as well as the iShares Top 20 U.S. Stocks ETF, which, if launched, would offer exposure to the biggest stocks within the tech gauge and the S&P 500, respectively.
The firm also submitted paperwork for the iShares Nasdaq-100 ex Top 30 ETF, which would track an index composed of the 31st-largest to the 100th-largest companies by market value in the Nasdaq 100.
That fund would conceivably allow investors to capture the boom in relatively smaller tech firms while avoiding the big behemoths.
Concentration Risk
BlackRock's filings to the US Securities and Exchange Commission come at a time of intense debate over stock-market concentration risk, which has been brewing as just a handful of equities — dubbed the Magnificent Seven — led the charge higher in the first half of the year.
The seven companies — Tesla Inc., Apple Inc., Meta Platforms Inc., Nvidia Corp., Alphabet Inc., Amazon.com Inc. and Microsoft Corp. — accounted for the majority of gains in the S&P 500 and Nasdaq 100, which sparked fears among market-watchers that those same firms would also drag the market lower when they sell off, something that's proven prescient in recent days.
"It speaks to the concentration dichotomy in the market," said Athanasios Psarofagis, ETF analyst at Bloomberg Intelligence. "You're either all-in on a few names or avoiding them altogether."
Tech stocks staged a speedy ascent in the first half of the year, with the Nasdaq 100 posting double-digit gains through the end of June thanks to surges in the likes of Nvidia and Microsoft, as well as other firms tied to artificial intelligence.
Over the past month, however, they've experienced some of the biggest declines within a market-wide selloff that's dragged down other asset classes as well.
