The Roundhill Magnificent Seven ETF (BATS:MAGS), which offers equal-weight exposure to the seven tech titans often referred to as the “Magnificent Seven,” has seen an impressive 45.17% return over the past year. However, despite strong performances from several stocks within its portfolio, MAGS has remained flat this year-to-date (YTD). A closer look at individual stock performances and the fund's structure sheds light on this stagnation.

Tesla's Troubles Weigh On MAGS

Tesla Inc. (NASDAQ:TSLA), one of the seven stocks in MAGS, has been a major drag on the ETF's performance. The electric vehicle maker has been on a five-day losing streak, closing at $328.50 on Tuesday—its lowest level since mid-November 2024. After surging over 50% following Donald Trump's election win in November, Tesla's momentum has faded, with investors shifting focus to its fundamentals. With high valuation, weaker-than-expected deliveries, production challenges and increasing competition in the EV space, Tesla has struggled, declining 10.53% YTD, making it the worst-performing Mag-7 stock so far.

Investor Caution Weighs on Nvidia, While Meta Shines

Nvidia Corp. (NASDAQ:NVDA) investors have typically rushed to buy the stock on any dips, but the mood has shifted following a sharp selloff driven by Chinese AI startup DeepSeek. Nvidia shares slumped 17% in a single day, wiping out about $590 billion in market capitalization, after DeepSeek claimed high performance at a lower cost. While the stock has regained some ground, it remains over 12% below its January record high, signaling growing fears of a slowdown in AI spending, said Bloomberg. The stock is down 4.85% so far this year.

Also Read: Nvidia Stock Remains Analyst’s Top Pick: ‘DeepSeek Selloff Is A Buying Opportunity’

Meanwhile, Meta Platforms Inc. (NASDAQ:META) has been a bright spot, driven by robust advertising revenue, cost-cutting measures and its increasing investment in AI-driven innovations. The stock has gained substantially in early 2025, helping offset losses elsewhere in the fund. The stock is up 20.85% this year thus far.

However, not all MAGS components have fared as well. Apple Inc. (NASDAQ:AAPL) has faced headwinds from weakening iPhone demand in China and regulatory challenges in the EU, dipping 3.51% YTD. Alphabet Inc. (NASDAQ:GOOGL) has also had a tepid start to the year, with concerns over increased AI competition and potential ad revenue slowdowns weighing on its stock price. GOOGL stock has dipped almost 3% so far this year.

Also Read: Meta’s AI Push Could Add $100 Per Share While Tesla Faces EV Headwinds: Top Analyst

Equal-Weight Structure Keeps Gains In Check

One crucial factor behind MAGS' flat performance is its equal-weighting strategy. Unlike the S&P 500 or Nasdaq indexes, which are weighted by market capitalization, MAGS ensures that each of the seven stocks carries nearly the same portfolio weight. While this strategy prevents any single stock from dominating the fund, it also means that even when gains and losses in the stocks counterbalance one another.

While the MAGS ETF has outperformed the broader Nasdaq over the past year, its equal-weight structure has contributed to its lackluster YTD performance. With Tesla and Nvidia dragging the fund down and Apple and Alphabet also struggling, the gains from Meta haven't been enough to push MAGS higher.

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