Answers by Paul Rickard
Can I buy an ETF to invest in the “Magnificent 7”? What do the brokers think of gold miner Northern Star Resources? Why did Macquarie’s share price drop by $10? With the aussie dollar hitting 66c, is it too late to hedge my international shares?
Question 1: Who are the “Magnificent 7”, and is there an ETF that I can buy?
Answer: The “Magnificent 7” are Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA and Tesla. In 2025, some commentators have replaced Tesla with Broadcom.
You can of course buy the individual shares if you have a US shares account. In Australia, there is no ASX listed ETF that matches the “Magnificent 7’ exactly. There are ETFs that follow a broader range of stocks (including the Magnificent 7).
Betashares NDQ or HNDQ tracks the NASDAQ 100 index (NDQ is the unhedged version, HNDQ is the currency hedged version). The Magnificent 7 weights at about 43% of the NASDAQ 100 index. The other 93 stocks, which includes Broadcom at about 5%, make up the balance of 57%.
FANG from Global X tracks an index of 10 stocks, roughly equal weighted. 6 out of the 10 stocks are from the Magnificent 7 (no Tesla), giving a weighting of around 60%. Broadcom is also in the mix, taking the weighting to around 70%. The other 3 stocks in FANG are Netflix, ServiceNow and CrowdStrike.
Question 2: Northern Star Resources (NST) has come off quite a bit despite the gold price rising. What do the brokers think?
Answer: The brokers have been a little disappointed with Northern Star’s gold production, costs or ASIC (all in sustaining cost) and expectations of increased capital expenditure. All were a miss on market guidance. As a result, the brokers cut target prices.
According to FN Arena, there are 4 “buy” recommendations and 3 “neutral” recommendations. The consensus target price is $20.95, about 28.2% higher than the last ASX price of $16.34. The range is a price target of $17.60 from UBS through to a high target of $21.00 from Citi.
Question 3: Why are Macquarie (MQG) shares down about $10 this morning?
Answer: Macquarie is holding its AGM and also delivered a first quarter trading update. The Bank didn’t provide numbers, but said that “that Macquarie’s net profit contribution for the three months to 30 June 2025 was down on 1Q25, with improved performance in Banking and Financial Services (BFS) and Macquarie Capital (MacCap), more than offset by lower contributions from Macquarie Asset Management (MAM) and Commodities and Global Markets”.
Question 4: The Aussie dollar is now touching 66c. Is it too late to hedge my US shares? Is there an easy way to hedge?
Answer: It is not easy for an individual investor to hedge currency exposures. You can look at currency options, currency forwards and some other derivative products, but for most individuals, these are out of reach.
A relatively easy way is to take exposure through currency hedged ETFs. For example, IHVV rather than IVV, or HNDQ rather than NDQ (the former tracks the S&P 500 index, the latter the NASDAQ 100). The downside with this is that you are investing in an index, and with the currency hedged version (e.g. IHVV), the management fee is marginally higher than the non-currency hedged version (IVV).
There are also some actively managed funds (e.g. MSTR from Morningstar) that are largely currency hedged.
Is it too late? I don’t think so. With a US administration (President Trump’s team) that has an explicit policy to weaken the US dollar, plus most commentators feeling that an AUD exchange rate of 0.66 is lower than the long term “average/norm” of around 0.75, I don’t think it is too late to hedge.
