Forget Tech Growth — Mag-7 ETFs Are All About Income

The term Magnificent 7, referring to seven specific top stocks— Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla—was coined in 2023 by a Bank of America stock analyst. The term was a take on the 1960 western, The Magnificent Seven, which was nicely remade in 2016.

Surprisingly, there are few ways to invest in the Mag7 with a single fund or ETF. As far as I know, the Roundhill Magnificent Seven ETF (MAGS) is the only ETF that provides equal weight investment exposure to those seven stocks and only those stocks. 

However, two covered-call/option-strategy ETFs offer Magnificent 7 investment exposure and also pay substantial dividend yields.

The YieldMax Magnificent 7 Fund of Option Income ETFs (YMAG) launched on January 29, 2024. The fund’s portfolio consists of equal-weighted positions in YieldMax’s single-stock covered call ETFs. With the fund-of-funds approach, YieldMax charges an additional 0.25% on top of the expenses of the individual ETFs.

YMAG pays weekly dividends and has a current distribution yield of 54.7%. Since its launch, the ETF has posted a total return of 44.14%.

The Roundhill Magnificent Seven Covered Call ETF (MAGY) was launched into the market on April 23, 2025, and therefore missed the early 2025 bear market. MAGY owns shares of MAGS (see above) as its portfolio assets. The Roundhill fund managers sell short-term call credit spreads on MAGS to generate cash for dividends.

MAGY pays weekly dividends and has a current distribution yield of 34.9%.

Since MAGY has been around for a significantly shorter time than YMAG, we will compare returns since the launch of MAGY.

Over the last four months, YMAG, with a total return of 26.1%, has outperformed the 17.7% posted by MAGY. I currently have MAGY as a portfolio investment in my ETF Income Edge newsletter service. I may need to rethink that position.