Over the past one year, the tech-heavy Nasdaq-100 has risen by 21.64%. Of the 100 constituents of this index, the vast proportion of the index’s rise has been attributed to the “Magnificent Seven”: Nvidia (NVDA), Meta Platforms (META), Amazon.com (AMZN), Microsoft (MSFT), Apple (AAPL), Alphabet (GOOGL) and Tesla (TSLA). The reasons behind this are two-fold:

1. Since a massive proportion of America’s mass manufacturing departed from its shores in increasing numbers after the end of the Cold War, “dot-com” companies predominantly focused on the then-nascent internet – captured the imaginations of both institutional and retail investors. As technology became more trenchant, the interest in “dot com” essentially morphed into interest in “tech”. The Magnificent Seven lie at the epicentre of this interest.

2. As the American economy became ever-more entrenched in an affordability crisis manifesting into the current economic turbulence, a survivability bias was imprinted into these companies that had long outgrown their “startup” phase to become sprawling enterprises.

Interest in tech remains high and volatile. For instance, in Week 37 of this year (ending September 16), the S&P 500 Top 25 list by momentum (-1.14%) underperformed the S&P 500 index (-0.16%). The Nasdaq-100 Top 25 list (-1.33%) underperformed the Nasdaq -100 index (-0.51%). In both cases, the lead causes of market decline were “tech” stocks. In Week 36, the S&P 500 Top 25 list (-1.03%) outperformed the S&P 500 index (-1.29%) while the Nasdaq-100 Top 25 list (-0.54%) outperformed the Nasdaq-100 index (-1.36%). The lead causes of a reduced decline were also tech stocks.

Capitalising on this deep-set interest is Leverage Shares’ recently-launched FAANG+ ETP “FAN1” that is built on seven “core” tickers – Meta Platforms, Microsoft, Apple, Amazon.com, Alphabet (Class A), Netflix and Tesla – as well as three additional stocks – NVIDIA, Salesforce.com and Advanced Micro Devices. Unlike many of Leverage Shares’ other products, FAN1 doesn’t have a leverage factor to amplify daily performance. Instead, the constituents are rebalanced on a daily basis such that the constituents are held in equal proportion.

The value of FAN1 in a market inclined towards tech cannot be overstated: over the past one year (which includes both a backtested period as well as the period since the product went live) until the 15th of September, FAN1 has delivered 55.11% returns while the Nasdaq-100 and S&P 500 have delivered 19.74% and 14.9% respectively.