This One ETF Strategy Beat 94% of Hedge Funds Last Year

April 17, 2025

While hedge funds scrambled to hedge, diversify, and overthink 2025…

One ETF quietly crushed nearly every one of them last year.

No leverage.
No fancy derivatives.
Just seven companies — and one clear trend.

This isn’t just a stat. It’s a signal.

The market is rewarding focus, not complexity.

This Isn’t Just About MAGS.

The Roundhill Magnificent Seven ETF (MAGS) returned 64% in 2024.

By contrast:

  • The S&P 500 gained 23%.

  • The average hedge fund returned ~10.7%.

  • Only 4% of hedge funds beat the S&P.

Translation?

MAGS outperformed over 94% of hedge funds — by doing less, not more.

✅ Want to access MAGS quickly and commission-free?

Robinhood makes it easy to invest in ETFs like MAGS with zero trading fees, instant deposits, and an intuitive mobile app.

It’s built for investors who want speed, simplicity, and control — whether you're investing $100 or $100K.

What Most Investors Are Missing

This wasn’t luck. It was strategy.

But here’s what most people overlook:

  • Concentration is not the enemy — it’s a weapon.
    MAGS went all-in on the seven tech giants shaping AI, cloud, and digital infrastructure.

  • Thematic momentum matters.
    AI wasn’t just hype. It showed up in revenue, margins, and capital flows.

  • No active missteps.
    While hedge funds shorted AI stocks, hedged rate risk, or sat in cash — MAGS rode the wave.

Complexity Is Overrated

Let’s be real.

Most hedge funds underperform because they try to do too much:

  • Exotic strategies

  • Macro bets

  • Over-diversification

  • High fees that eat alpha

Meanwhile, an index of seven household names left them in the dust.

Here’s What Smart Investors Do Now

This isn’t a “buy MAGS” pitch. It’s a rethink-your-strategy moment.

✔️ Identify megatrends — AI, automation, cloud, digital payments
✔️ Concentrate with purpose — Own the winners, not the average
✔️ Use simple tools — Indexing still works, if you index intelligently

Thematic ETFs let you get exposure without picking single stocks — but with conviction.

And conviction is what wins bull markets.

The Bottom Line

2024 was a masterclass in simplicity beating sophistication.

If you're chasing too many signals, trimming too many edges, or reacting to every rate move… you're playing the wrong game.

MAGS proved that focused exposure to real innovation still works.

Because in the long run, the market doesn’t reward activity.

It rewards clarity.

Best regards,
—StocksTrades.AI Newsletter

Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions.