Magnificent Seven stocks: how much of your pension is invested in the leading tech stocks?

The ‘Magnificent Seven’ is made up of market-leading companies, such as Amazon, Nvidia and Tesla. New research shows these firms now play a big part in our pension pots.

A man uses a device produced by one of the Magnificent Seven
The Magnificent Seven are 'intricately tied' to the financial outcome of our retirements, PensionBee has found
(Image credit: Getty Images)

For much of the past year, the so-called Magnificent Seven (MAG7) stocks have been delivering market-leading growth.

The unofficial grouping of major tech firms, which includes Apple, Meta and Microsoft, led to 80% of the S&P 500’s gains in 2023 thanks to big developments in artificial intelligence (AI). So far this year, their performance has diverged somewhat. For example, while Nvidia stock has seen record growth off the back of a surge in profits, Tesla has been struggling to maintain its performance amid a sales slump.

Still, the MAG7 is still worth close to $13 trillion and is proving to be extremely popular among investors. And this is especially true for pension savers, new analysis from PensionBee has shown. The pensions provider has found that around 10% of defined contribution pots in the UK are invested in the tech titans.

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So, how much of your money is going towards the AI boom? We’ve looked at PensionBee’s findings to find out.

How much of my pension is invested in the Magnificent Seven stocks?

PensionBee has found millions of pounds are likely to be funding the biggest tech companies on the planet. Using data from its own platform, as well as fellow default pension funds Nest and The People’s Pension, it found a typical UK saver could have £2,033 invested in the MAG7 stocks.

Working on the assumption that the typical UK pension pot contains £20,000, it found tech stalwarts Microsoft and Apple were attracting the highest level of pension investment out of the stock grouping. The pair’s allocation was £437 (2.6% of the typical pot) and £420 (2.5%) respectively, on average.

High-flying chipmaker Nvidia (£353, or 2.1%) and Google’s parent company Alphabet (£286, 1.7%) made up the third and fourth biggest investments. Amazon (£218, 1.3%), alongside younger upstarts Tesla (£168, 1%) and Facebook’s owner Meta (£151, 0.9%), rounded out the MAG7 investments.

Should you be worried about your pension investing so much money into the MAG7?

According to PensionBee, the Magnificent Seven are attracting such a high proportion of our pension money because of their consistency when it comes to growth and how they react to shocks in the wider market. They are also seen as long-term prospects, given their constant innovation, worldwide reach and sturdy balance sheets. This appeal is further enhanced by the diversity of sectors they operate in, from e-commerce to the automotive industry.

But while the financial reasoning is relatively sound, you may be concerned that your money is supporting unethical practices. After all, some MAG7 members have been attracting publicity for all the wrong reasons. For example, Meta boss Mark Zuckerberg recently apologised for the social media harms his platforms have been accused of causing children, while Amazon has repeatedly come under fire for its attitude to paying corporation tax and UK workers' rights.

PensionBee said a recent survey it had conducted had found misgivings among savers about the practices of some of these tech firms. Between 60% and 70% of those surveyed raised concerns about AI, citing its potential impact on news and human rights.

With AGM season on its way, chief engagement officer at the provider Clare Reilly said it was “crucial” savers recognised that their interests are “intricately tied” to the tech giants. She said: “Through our pension savings, we’re all investors in the biggest tech giants that dominate our everyday lives – from our smartphones to the convenient online marketplaces we use to shop.

“Whether or not we actively monitor our investments, our retirements, and even our ability to retire at all, currently hinge upon the fortunes of these companies. Part of the reason they feature so heavily in pension funds is their scale, but also their financial performance. Love them or loathe them, our lives are inexorably linked to their success.”

PensionBee said savers may be able to engage with the firms they have unwittingly invested in during AGM season - for example, by attending the events and asking questions at them. It said they could also write to the companies and take part in investor advisory communities to provide feedback.

Henry Sandercock
Staff Writer

Henry Sandercock has spent more than eight years as a journalist covering a wide variety of beats. Having studied for an MA in journalism at the University of Kent, he started his career in the garden of England as a reporter for local TV channel KMTV. 

Henry then worked at the BBC for three years as a radio producer - mostly on BBC Radio 2 with Jeremy Vine, but also on major BBC Radio 4 programmes like The World at One, PM and Broadcasting House. Switching to print media, he covered fresh foods for respected magazine The Grocer for two years. 

After moving to NationalWorld.com - a national news site run by the publisher of The Scotsman and Yorkshire Post - Henry began reporting on the cost of living crisis, becoming the title’s money editor in early 2023. He covered everything from the energy crisis to scams, and inflation. You will now find him writing for MoneyWeek. Away from work, Henry lives in Edinburgh with his partner and their whippet Whisper.