Defiance Large Cap ex-Mag 7 ETF

XMAG

Market cap $177M

In H1 2026, part of my 2026 framework was confirmed: AI‑driven productivity, industrial strength, and utilities' power‑demand tailwinds played out, while the Iran shock created the only major deviation from expectations. However, the macro backdrop is changing: Brent is back in contango, Warsh is firmly higher‑for‑longer, growth and labor remain resilient, and hyperscalers continue pushing toward trillion‑dollar cumulative AI capex.

Amid a historic surge in chip stocks and a continued malaise for software, investors have all but forgotten about the once stalwart Mag Seven group of stocks.

If you own an ETF tracking the S&P 500 or the Nasdaq-100, the Magnificent Seven are unavoidable.

The Defiance Large Cap ex-Mag 7 ETF (NASDAQ:XMAG) and the Roundhill Magnificent Seven ETF (NASDAQ:MAGS) are photographic negatives of one another.

XMAG has overtaken both RSP and the Mag-7 since May 2026, reversing the first four months of the year when the equal-weight index was leading the breadth rotation trade. Beneath the 2026 outperformance, XMAG's top holdings have shifted dramatically in just one month. Understanding which names are climbing is the first step to evaluating this ETF. In this article, I explore the central paradox of XMAG: an ETF engineered to reduce Mag-7 exposure whose outperformance may owe more to those same seven companies than its construction.

Passive index investing has a concentration problem. The seven largest technology companies now account for roughly 35% of the S&P 500, which means owning a standard index fund today is less “broad market” and more “bet heavily on a handful of AI-driven mega-caps.

Stripping the Magnificent 7 from the

Defiance Large Cap ex-Mag 7 ETF earns a "Buy" rating for its diversification and relative strength over the past several months. XMAG offers exposure to the S&P 500 excluding the Magnificent 7, reducing concentration risk and providing a more balanced sector allocation. Valuation is reasonable at a 20.4x P/E and a PEG just under 2.0x, with a 1.5% dividend yield and improving technicals.

MIAMI, Jan. 08, 2026 (GLOBE NEWSWIRE) -- Defiance ETFs today announced that the Defiance Large Cap Ex-Magnificent Seven ETF (XMAG) has surpassed $100 million in assets under management, marking a significant milestone since the fund's launch in October 2024. XMAG is designed to provide investors with exposure to the S&P 500 while excluding the “Magnificent Seven” technology companies: Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla.

Debuting in tandem with the BITA US 500 ex-Magnificent 7 Index to be its ETF correspondent, The Defiance Large Cap ex-Mag 7 ETF has barely been in operation for a year, but has posted some impressive results to date. Surprisingly, instead of the anticipated 7%, the ETF itself is boasting 13.54% YTD return.