How to invest in the magnificent seven stocks on the ASX

Want to invest in the magnificent seven? It's easy on the ASX.

Sebastian Bowen

Author Bio Sebastian Bowen has been a Motley Fool contributor since late 2018. Sebastian found his passion for writing and educating others about shares and all things finance after completing his studies in political, economic and social science and enjoys bringing this passion to life at the Fool. His investment philosophy is a simple one – buying high-quality companies at prices that make sense. When he’s not researching his next investment at all hours of the morning, Sebastian enjoys classic movies and likes to unwind with a good book, newspaper or record. Areas of Expertise Dividend investing ETFs Education Bachelor of Political, Economic, and Social Sciences (Government and International Relations), University of Sydney Social Media X/Twitter Favorite Investment Quote "In the short run, the market is a voting machine, but in the long run, it is a weighing machine." – Benjamin Graham

Published March 2, 2024 7:30 am AEDT

Interest in the 'magnificent seven' stocks here on the ASX has arguably never been as strong as it is today.

The likes of Apple Inc (NASDAQ: AAPL), Amazon.com Inc (NASDAQ: AMZN), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), Meta Platforms Inc (NASDAQ: META) and Netflix Inc (NASDAQ: NFLX) have long dominated ASX investor interest.

These US tech shares have been growing at jaw-dropping rates for decades now. ASX investors are probably familiar with the old 'FAANG' acronym (now defunct thanks to various name changes) that these companies used to be grouped under.

But thanks to the rise of other tech giants, namely Tesla Inc (NASDAQ: TSLA), Microsoft Corporation (NASDAQ: MSFT) and (especially) NVIDIA Corporation (NASDAQ: NVDA), FAANG has been replaced with 'the magnificent seven'.

It's not really clear why Netflix has been dropped as a star stock here. I suppose the 'magnificent eight' doesn't have the same ring to it. Nor the same connection to old Hollywood.

As you'll no doubt be aware, it's impossible to directly invest in these seven stocks here on the ASX. Given they are all US-listed companies and all.

However, that doesn't mean ASX investors who want a slice of the 'magnificent' action but don't want to directly buy US shares, are out of luck. There are a few ways ASX investors can invest in these companies from the comfort of their own markets.

a man smiles broadly as he holds up five fingers on one hand and two fingers on the other hand. — Image source: Getty Images

How to invest in the magnificent seven on the ASX

So the most direct way to invest in the magnificent seven on the ASX is arguably through exchange-traded funds (ETFs).

The ETF that gives investors the purest access is probably the Global X FANG+ ETF (ASX: FANG).

This ETF holds just ten underlying holdings. Seven of which, you guessed it, are the magnificent seven. The other three are Broadcom Inc (NASDAQ: AVGO), Snowflake Inc (NYSE: SNOW) and our old friend Netflix.

Each of these ten stocks currently commands a FANG portfolio weighting of between 7.21% (Tesla) and 13.79% (Nvidia).

This means that if one invests $100 into this ETF, almost $70 will be invested across the magnificent seven.

That's about as close as you can get to directly investing in these companies yourself on the ASX.

Another option is opting for a Nasdaq index fund. The magnificent seven are currently among the eight largest stocks by market capitalisation on the Nasdaq stock exchange. So an index ETF like the BetaShares NASDAQ 100 ETF (ASX: NDQ) is going to have a sizeable allocation to each of them.

At present, if one invests $100 into NDQ units, just over $40 of that invested capital will end up in the magnificent seven. The other $60 or so will go towards other Nasdaq shares like Adobe Inc (NASDAQ: ADBE), Netflix, Starbucks Corp (NASDAQ: SBUX) and Airbnb Inc (NASDAQ: ABNB).

So these two ASX ETFs are probably the easiest way for an Australian investor to invest in the magnificent seven stocks without leaving the ASX.

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