At the height of the technology bubble in 2000, the 10 largest companies in the world had market values ranging from $197 billion (Deutsche Telekom) to the $606 billion at one point sported by Microsoft (NASDAQ: MSFT).
Back then, those were big numbers. Not so much these days. Today, there 12 stocks tied to 10 companies residing in the S&P 500 with market values of at least $1 trillion. The 12 and 10 difference is attributable to two share classes for Berkshire Hathaway and Google parent Alphabet (NASDAQ: GOOG). With a market capitalization of $4. 55 trillion on Oct. 1, it could be just a matter of weeks or months before Nvidia (NASDAQ: NVDA) becomes a $5 trillion company.
Point is much like 50 is the new 40 in age terms, $1 trillion is the new $500 billion and there’s a new exchange traded fund with which to capitalize on that theme. The Defiance Trillion Dollar Club Index ETF (NASDAQ: TRIL) debuted on Monday, Sept. 30.
TRIL Details
One way of looking at TRIL is that the rookie ETF expands on the concept of the magnificent seven grouping and the ETFs, of which there are plenty, that devoted to that famed cohort of growth stocks.
“The Magnificent 7 is a thing of the past. We believe assets over $1 trillion will become the primary proxy for index investing, fueled by the AI revolution and the evolution of Bitcoin. Crossing the trillion-dollar threshold is more than a milestone — it’s a declaration of global dominance,” said Sylvia Jablonski, CIO of Defiance ETFs, in a statement.
TRIL follows the BITA Trillion Dollar Club Index, which hails from an index provider with an extensive list of benchmarks. So TRIL is a passively managed ETF, implying that if and when other companies or cryptocurrencies enter the $1 trillion club, the index could make room for those assets at its various rebalancing dates, potentially paving the way for entry into TRIL itself.
Speaking of crypto, the new ETF’s bitcoin (that digital currency has a market cap of $2. 34 trillion) exposure is achieved via a stake in the iShares Bitcoin Trust (IBIT), the largest spot bitcoin ETF in the world.
Some Notable Omissions From TRIL
If there’s a quibble to be had with TRIL, it’s that the new ETF doesn’t provide exposure to all of the world’s $1 trillion+ assets.
Admittedly, I had difficultly finding extensive information BITA Trillion Dollar Club Index, but I’m going to assume the selection universe for TRIL’s benchmark is confined to US-based companies and cryptocurrencies. That conclusion is derived from Saudi Aramco and Taiwan Semiconductor (NYSE: TSM) sporting market caps of $1. 62 trillion and $1. 49 trillion, respectively, and not being members of the TRIL roster.
Arguably conspicuous by their absences from the new ETF are gold and silver, the former of which is the world’s most valuable asset. So much so that its market value is more than 5x Nvidia’s. Even with those omissions, TRIL is a nifty concept and it could gain traction with risk-tolerant investors because the magnificent seven+ with a bitcoin kicker methodology is well-timed and potentially attractive to a broad swath of market participants.