What percentage of the S&P 500 is the Magnificent Seven?

It changes every trading day, because the index is weighted by market value and the seven prices move. Look up the current weights on your fund's holdings page, add the seven together, and write down the date. Any figure remembered from an article is already stale by the time you use it.

Does owning an S&P 500 fund and a Nasdaq-100 fund diversify me?

Only partly. Both are cap-weighted, so the largest companies sit near the top of each, and the two funds overlap heavily there. Owning both can raise your stake in the same few names. Add up the overlap before you assume two funds means twice the spread.

Is an equal-weight index fund a better way to hold the S&P 500?

Equal weighting gives every member the same slice, so the seven shrink to a small share of the fund. It also moves weight toward the smaller members and trades more often to stay balanced. It is the better fit if concentration in the largest companies is a risk you want to cut.

Mag 7 Case Study: How Much of Your Portfolio Is Seven Stocks?

$18,000, plus $6,000, plus $10,000. That’s how much of one hypothetical $100,000 portfolio sits in seven companies, and the owner would have guessed $10,000, because that’s the only part bought on purpose.

The seven are the companies the market nicknames the Magnificent Seven: Apple, Microsoft, Alphabet, Amazon, Meta Platforms, Nvidia and Tesla. The nickname groups a set of very large US companies. It says nothing about whether any of them is worth buying at a given price. The case below attaches no price, return or market value to any of them.

The portfolio as the statement shows it

The statement lists these holdings.

$60,000 in an S&P 500 index fund.
$15,000 in a Nasdaq-100 index fund.
$10,000 in shares of two of the seven.
$15,000 in bonds and cash.

Read line by line, that looks like broad funds, some favorite names and a cushion. Most people would call it diversified. On the count of funds alone, it is.

Why an index fund can be mostly the same names

A cap-weighted index holds each company in proportion to its market value, so the largest companies take the largest slices, and when a handful of companies grow far bigger than the rest, a fund tracking that index puts more of every new dollar into them without anyone at the fund choosing to. That’s the rule the index follows.

Both funds here are cap-weighted. The S&P 500, maintained by S&P Dow Jones Indices, covers large US companies across sectors. The Nasdaq-100 holds the largest non-financial companies listed on the Nasdaq exchange, which tilts it further toward technology. The seven sit near the top of both, so the same companies appear once in each fund and a third time if you also own them directly.

The weights move every trading day. Prices change, and the weights follow.

The look-through sum

Look-through exposure means counting what your funds hold as though you held it yourself. The weights below are assumptions for the sum, picked as round numbers. Swap in the figures from your own funds.

A third of the money rides on seven companies. The owner thought it was a tenth.

The gap came from the funds. The $10,000 of direct shares is the visible part and the part people fret about, yet it’s less than a third of the total; the other $24,000 arrived through funds that were bought because they felt broad. Several of the seven share exposure to the same forces, such as technology spending, advertising budgets and how much investors will pay for growth, so when those forces turn, the seven can fall together, and a portfolio with 34% in them takes the hit across every fund line at once.

On a statement that risk is easy to miss. Each fund shows up as a single line. Nothing on the page adds the seven together for you, so the only way to see the total is to open the holdings list of every fund you own and do the sum yourself.

Set the cap before the next purchase

Know the look-through number before you add to any of the seven, whether that’s a direct buy or another deposit into the same index funds. Then decide a cap and write it into your plan.

Take a cap of 25% as an example. On $100,000 that allows $25,000 in the seven, so this portfolio is $9,000 over. The right figure for you depends on your age, your other assets and how deep a fall you could sit through without selling.

Why decide it early? The urge to buy more usually shows up after the stocks have run, and a limit chosen in that mood tends to get set just high enough to allow the purchase. Pick the number on a quiet day.

Recount the look-through exposure once or twice a year, and before any purchase of one of the seven.
If the count is above the cap, new money goes elsewhere until the count is back under it.
If a fund’s weight in the seven has grown, that growth counts toward the cap like any direct share would.

For how many holdings it takes to spread single-company risk, see how many stocks you should own. More on the investing side sits under investing.

Ways to bring the number down

If the count comes out over the cap, these common changes lower it. Each one also changes the portfolio in some other way.

Change	Effect on the seven	What else it changes
Equal-weight S&P 500 fund	Every member gets the same slice, so the seven shrink to a small share	More weight in the smaller members; more trading inside the fund to stay balanced
Funds in other sectors	Adds companies outside technology and the big consumer names	A sector fund carries its own concentration
Smaller-company funds	Mid-cap and small-cap funds hold none of the seven while they stay large	Bigger swings and a different reaction to interest rates and credit
International funds	Adds companies listed outside the US	Currency moves, and different accounting and market rules

Selling the direct shares is the fastest lever. In a taxable account it can also bring a capital gains bill, so check the tax side first; situations differ. Redirecting new money is slower and costs nothing in tax. If income matters to the plan, dividend ETFs versus dividend stocks covers the fund side of that choice.

Concentration is fine when you chose it and sized it

The case has a limit. Concentration is a choice as well as a risk, and someone who expects these seven companies to keep outgrowing the rest of the market can hold 34%, or more, as a deliberate position. What goes wrong is holding it by accident.

So write down the number and the reason. Then write down what you’ll do if the seven fall together: hold, rebalance to the cap, or buy more. An investor who has answered that in advance owns the exposure on purpose, sized to a limit, and can recheck it whenever the weights shift, using the kinds of data sources gathered in trader resources.