Defiance Seeks SEC Approval For ETF Tied To Trump Policies: 'You Could Have A Nice Run, But...'

Defiance ETFs filed for approval of the MAGA Seven ETF (MAGT) with the U.S. Securities and Exchange Commission (SEC), according to a report by ETF.com.

What Happened: The fund aims to build a portfolio of just seven stocks that, according to Defiance, "appear positioned to benefit from the economic, regulatory, and policy environment shaped by the Trump administration and its potential future impact."

The name MAGT is a play on the Magnificent 7, the tech stocks that have led the market's rally over the past few years. But unlike the traditional tech-heavy lineup, MAGT's holdings will be actively selected and equally weighted, according to etf.com. Companies can be swapped in and out based on their alignment with Trump-era or future policies.

Also Read: Trump Reportedly Warns Big Pharma – Move Manufacturing To US Or Face Tariffs

One of Trump's first executive actions in his second term was rolling back regulations on artificial intelligence (AI), aiming to "clear a path for the United States to act decisively to retain global leadership in artificial intelligence." This move is expected to fuel rapid advancements in AI innovation and development, creating investment opportunities in AI-focused stocks and ETFs.

Trump also announced a $500 billion AI infrastructure initiative in January, called Stargate. Initial funding for the initiative will come from SoftBank, OpenAI, Oracle ORCL, and UAE-based MGX.

Given this backdrop, AI-focused stocks and ETFs could be among the biggest beneficiaries of Trump's second term.

Why It Matters: The concentrated nature of MAGT's portfolio could mean big wins or big losses.

"Depending on the stocks, you could really have a nice run, but the concentration could also lead to underperformance," said Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, per the ETF.com report.

MAGT is directly tied to Trump's policy impact on businesses.

Under the Biden administration, antitrust measures targeted big players like Google GOOGL, Amazon AMZN, and Apple AAPL. Trump, however, has indicated a more lenient stance, signaling that Big Tech may face fewer regulatory hurdles under his administration.

Trump is likely to continue several antitrust cases against major tech companies, he also expressed skepticism about breaking them up. In October, he questioned whether dismantling Google would harm the company too severely. This shift in regulatory stance could further position tech stocks favorably under Trump's leadership.

What’s Next: While MAGT's exact holdings remain unknown, Balchunas speculates that stocks like Tesla TSLA, Coinbase COIN, and Amazon could be included, per ETF.com. These names have already performed well under Trump's presidency and could see further gains if policies shift in their favor.

Investors should keep in mind that while politics shape policies, markets have a mind of their own.

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