New ‘MAGA 7’ ETF Looks to Tap Conservative Policies

Make the ETF market great again.

The latest exchange-traded fund filing is aiming to take advantage of Trump 2.0 and a new conservative administration that will certainly shape the market over the next four years. Defiance ETFs filed for an actively managed fund last week that would track seven companies positioned to benefit from a new “economic, regulatory, and policy environment.” The Defiance MAGA Seven ETF (MAGT) will focus on companies that are aligned with national security initiatives, have business models that support Trump’s political network, and likely fall in the energy, defense, infrastructure, and artificial intelligence sectors, per the filing. 

It could represent a novel means for advisors and clients to take advantage of the next administration’s economics or become just another launch in a laundry list of filings trying to tap into politics.

“History has shown that playing politics within your investment portfolios can be risky,” said Ben Loughery, founder of Lock Wealth Management, adding that trying to time markets based on political cycles can easily backfire.

What’s the MAGA 7?

The MAGT filing did not list specific companies and said it will periodically rotate securities in and out of the index. While Defiance didn’t respond to specific questions, and the fund’s advisor Tidal declined to comment, there might be some clues right in the name: 

• Robinhood, Williams-Sonoma, AppLovin, MicroStrategy, Tesla, Ubiquiti, and Coinbase were dubbed the “MAGA 7” by MarketWatch last month. 
• The prices of those large-cap stocks increased by the largest percentages between Election Day and Trump’s inauguration.
• The septet’s year-to-date performance is mixed: Robinhood is riding high, up almost 30%; while Tesla, run by Trump’s bosom buddy Elon Musk, has seen its share price drop nearly 10%.

Political Excitement. The MAGA 7 ETF isn’t the first product to take advantage of the pro-Trump, conservative buzz — and it won’t be the last. The Trump Media & Technology Group Corp. is looking to file six funds, including the Truth.Fi Made in America ETF, that stand to benefit from conservative policy making. In December, startup issuer Azoria announced an ETF that invests in S&P companies that shun DEI practices. 

It can be easy for investors to get caught up in the excitement, but Loughery told Advisor Upside that clients are much better served by long-term, financial plans, rather than “chasing trends.”