BlackRock launches ETF that expands beyond the 'Magnificent Seven'

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 BlackRock's iShares is trying to appeal to investors who want to diversify beyond from the so-called Magnificent Seven.

The firm launched the iShares Top 20 U.S. Stocks ETF (TOPT) this month. It doesn't just hold the Magnificent Seven — Apple, Amazon, Meta, Alphabet, Microsoft, Nvidia and Tesla. It's made up of the 20 largest U.S. stocks by market capitalization.

«What the iShares build ETFs are designed to do is to deliver a tool kit of simple solutions for investors to be able to capture the growth of some of the largest companies within the U.S. equity market today, but to do so in a broader and more diversified manner,» BlackRock's Rachel Aguirre told CNBC's «ETF Edge» on Monday.

Aguirre, the firm's head of U.S. iShares product, noted the ETF's mission is to deliver an easy and accessible way to tap into the innovation of megacaps – «whether that be in the tech-heavy Nasdaq space or, more broadly, within the S&P [500].»

The ETF, according to Aguirre, provides a way for investors worried about the concentration of the «Magnificent Seven» stocks in the S&P 500.

On Thursday, the Magnificent Seven slid more than 3.5% as a group — losing around $615 billion in market cap. That's equivalent to the size of JPMorgan Chase.

However, the Magnificent Seven is still up about 43% so far year while the S&P 500 is up around 20%

«It's important for clients and investors to remember that there are split views on this topic. There are many investors who believe that the big will get bigger [and] that the winners will continue to win,» Aguirre said. «There's also another side to this argument. There are many investors who believe that it's actually a very worrisome time to continue investing in… mega-cap companies