The Magnificent Seven have become household names in the U.S., but China has its own version of market-defining giants, aka the “China Magnificent Seven”.
The China Magnificent Seven ETF (MAGC) offers investors a direct way to access China’s most innovative technology and consumer leaders, companies shaping not only the future of China’s digital economy but also influencing innovation, supply chains, and competition on a global scale.
The seven leading innovators driving the technology revolution in China are as follows:
Tencent (TCEHY)
U.S. Magnificent Seven Comp: Meta Platforms (META)
Tencent is one of, if not the most, well known Chinese multimedia company. WeChat/Weixin is heavily integrated into daily life for well over a billion people, encapsulating instant messaging, social media, and mobile payments that brands utilize for advertising and commerce, similar to how Meta monetizes engagement across Facebook, Instagram, and WhatsApp.
Tencent is also heavily integrated into the world of gaming, with either significant investments or complete ownership of reputable brands like Riot Games (League of Legends), Epic Games (Fortnite), and Roblox Corporation.
Alibaba (BABA)
U.S. Magnificent Seven Comp: Amazon.com (AMZN)
In our view, it is fair to think of Alibaba as the “Amazon of China.” Taobao/Tmall covers domestic retail and AliExpress/Lazada are Alibaba’s international retail brands. Meanwhile, Alibaba Cloud (Aliyun) serves as the infrastructure foundation, comparable with Amazon’s Prime + Amazon Web Services.
In the world of generative artificial intelligence, Alibaba builds and open-sources its Qwen family of AI models and delivers them to businesses through Alibaba Cloud’s Model Studio, powering use cases from chatbots to coding. These models are integrated throughout Alibaba’s products.
Meituan (MPNGY)
U.S. Magnificent Seven Comp: Alphabet (GOOGL)
Meituan could be described as a “Super App” and technological leader in China, offering a robust portfolio of services covering food delivery, restaurant reviews, ride-hailing, hotel and travel bookings, grocery delivery, and even bike-sharing. The company is also heavily involved in the AI revolution, having launched its own large language model, LongCat-Flash-Chat, alongside tools like its “Xiaomei” AI assistant and the Meituan Generative Recommendation (MTGR) system to enhance food delivery, logistics, and local services for its users.
Meituan connects consumers with local merchants and couriers across its various service segments much like how Alphabet connects users via Google Maps and Search.
PDD Holdings (PDD)
U.S. Magnificent Seven Comp: Meta Platforms (META) / Amazon.com (AMZN)
PDD Holdings operates social commerce platforms, doing business as Pinduoduo domestically in China and Temu internationally. Pinduoduo attracts price-sensitive shoppers in Chinese cities by encouraging users to share deals with friends or team up to unlock discounts. This social-driven gamified shopping style has made it one of China’s most engaging e-commerce apps. Temu offers a low-cost, factory-to-consumer model that leans on aggressive marketing and social sharing dynamics (referral bonuses, viral ads), echoing Meta’s ability to drive scale via virality and ad spend.
Xiaomi (XIACY)
U.S. Magnificent Seven Comp: Apple (AAPL)
Xiaomi is one of China’s top consumer technology brands, with a vast lineup spanning smartphones, wearables, smart TVs, and connected home devices. Much like Apple, it has built a sticky hardware and integrated ecosystem model, but differentiates itself with affordability and mass-market reach. With growing investments in EVs and AI-driven initiatives, Xiaomi is expanding beyond devices into a broader tech ecosystem, positioning it as China’s closest parallel to Apple.
NetEase (NTES)
U.S. Magnificent Seven Comp: Microsoft (MSFT)
NetEase is one of China’s leading technology and entertainment companies, best known for its expansive online gaming portfolio and strong presence in cloud music and online education. Like Microsoft, NetEase has built a deep ecosystem around software and digital services, with gaming as a core driver of revenue. Its longstanding partnerships with global leaders like Blizzard, and its own franchises such as Fantasy Westward Journey, position it as a dominant force in online entertainment, while its diversification into music streaming, learning platforms, and AI-driven applications makes it a broader digital services provider.
BYD (BYDDY)
U.S. Magnificent Seven Comp: Tesla (TSLA)
BYD is China’s largest electric vehicle and battery maker, with a fast-growing global footprint in passenger cars, buses, and commercial vehicles. Like Tesla, BYD integrates across the supply chain—from battery production to EV manufacturing—giving it cost advantages and technological control. Beyond cars, BYD’s strength in lithium iron phosphate (LFP) batteries and energy storage solutions makes it a key player in the broader electrification ecosystem, positioning it as Tesla’s closest Chinese counterpart in both EV innovation and energy technology.
For investors seeking a way to capture the growth and innovation of these Chinese market leaders, the China Magnificent Seven ETF (MAGC) offers direct exposure to this select group of companies, providing a focused lens on the firms shaping China’s technological and economic future.
Learn more about MAGC: https://www.roundhillinvestments.com/etf/magc/
Glossary:
The MSCI China Index captures large and mid cap representation across China A shares, H shares, B shares, Red chips, P chips and foreign listings (e.g. ADRs). With 554 constituents, the index covers about 85% of this China equity universe. Currently, the index includes Large Cap A and Mid Cap A shares represented at 20% of their free float adjusted market capitalization.
The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities and serves as the foundation for a wide range of investment products. The index includes 500 leading companies and captures approximately 80% coverage of available market capitalization.
Investors should consider the investment objectives, risks, charges, and expenses carefully before investing. For a prospectus or summary prospectus, if available, with this and other information about the Fund, please call 1-855-561-5728 or visit our website at www.roundhillinvestments.com/etf/DRAG. Read the prospectus or summary prospectus carefully before investing.
Prior to October 1, 2025, the fund was the Roundhill China Dragons ETF (DRAG).
China Risk. The Fund’s significant investments in instruments that provide exposure to Chinese companies subject the Fund to risks specific to China. China may be subject to considerable degrees of economic, political and social instability. China is an emerging market and demonstrates significantly higher volatility from time to time in comparison to developed markets. Over the last few decades, the Chinese government has undertaken reform of economic and market practices and has expanded the sphere of private ownership of property in China. However, Chinese markets generally continue to experience inefficiency, volatility and pricing anomalies resulting from governmental influence, a lack of publicly available information and/or political and social instability.
Chinese companies are also subject to the risk that Chinese authorities can intervene in their operations and structure. Internal social unrest or confrontations with neighboring countries, including military conflicts in response to such events, may also disrupt economic development in China and result in a greater risk of currency fluctuations, currency non-convertibility, interest rate fluctuations and higher rates of inflation.
China has experienced security concerns, such as terrorism and strained international relations. Additionally, China is alleged to have participated in state-sponsored cyberattacks against foreign companies and foreign governments. Actual and threatened responses to such activity and strained international relations, including purchasing restrictions, sanctions, tariffs or cyberattacks on the Chinese government or Chinese companies, may impact China’s economy and Chinese issuers of securities in which the Fund invests. Incidents involving China’s or the region’s security may cause uncertainty in Chinese markets and may adversely affect the Chinese economy and the Fund’s investments. Export growth continues to be a major driver of China’s rapid economic growth. Reduction in spending on Chinese products and services, supply chain diversification, institution of additional tariffs or other trade barriers (including as a result of heightened trade tensions or a trade war between China and the U.S. or in response to actual or alleged Chinese cyber activity) or a downturn in any of the economies of China’s key trading partners may have an adverse impact on the Chinese economy. The Fund’s portfolio may include companies that are subject to economic or trade restrictions (but not investment restrictions) imposed by the U.S. or other governments due to national security, human rights or other concerns of such government. So long as these restrictions do not include restrictions on investments, the Fund is generally expected to invest in such companies.
Chinese companies are not subject to the same degree of regulatory requirements, accounting standards or auditor oversight as companies in more developed countries. As a result, information about the Chinese securities in which the Fund invests may be less reliable or complete. Chinese companies with securities listed on U.S. exchanges may be delisted if they do not meet U.S. accounting standards and auditor oversight requirements, which would significantly decrease the liquidity and value of the securities. There may be significant obstacles to obtaining information necessary for investigations into or litigation against Chinese companies, and shareholders may have limited legal remedies. Chinese companies may also be subject to significantly weaker recordkeeping requirements than the requirements imposed upon U.S. companies.
Market Risk. Market risk is the risk that a particular security, or Fund Shares in general, may fall in value. Securities are subject to market fluctuations caused by such factors as economic, political, regulatory or market developments, changes in interest rates and perceived trends in securities prices.
Derivatives Risk. The use of derivative instruments (i.e. swap agreements and forward contracts) involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. These risks include: (i) the risk that the counterparty to a derivative transaction may not fulfill its contractual obligations; (ii) risk of mispricing or improper valuation; and (iii) the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset.
Active Management Risk. The Fund is actively-managed and its performance reflects investment decisions that the Adviser and/or Sub-Adviser makes for the Fund.
Depositary Receipts Risk. Depositary receipts may be less liquid than the underlying shares in their primary trading market. Any distributions paid to the holders of depositary receipts are usually subject to a fee charged by the depositary. Holders of depositary receipts may have limited voting rights, and investment restrictions in certain countries.
Swap Agreements Risk. The Fund may utilize swap agreements to derive its exposure to one or more of the China Dragons. Swap agreements may involve greater risks than direct investment in securities as they may be leveraged and are subject to credit risk, counterparty risk and valuation risk.
Consumer Discretionary Sector Risk. Consumer discretionary companies, such as retailers, media companies and consumer services companies, provide non-essential goods and services. These companies manufacture products and provide discretionary services directly to the consumer, and the success of these companies is tied closely to the performance of the overall domestic and international economy, interest rates, competition and consumer confidence. Success depends heavily on disposable household income and consumer spending.
Information Technology Companies Risk. Information technology companies face intense competition, both domestically and internationally, which may have an adverse effect on profit margins. Like other technology companies, information technology companies may have limited product lines, markets, financial resources or personnel. The products of information technology companies may face obsolescence due to rapid technological developments, frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel.
Large Capitalization Risk. Large capitalization companies may be less able than smaller capitalization companies to adapt to changing market conditions.
New Fund Risk. The Fund is a recently organized investment company with a limited operating history. As a result, prospective investors have a limited track record or history on which to base their investment decision.
Non-Diversification Risk. As a "non-diversified" fund, the Fund may hold a smaller number of portfolio securities than many other funds.
Concentration Risk. The Fund is concentrated in the industry or group of industries comprising the consumer discretionary sector and communication services sector.
Roundhill Financial Inc. serves as the investment advisor. The Funds are distributed by Foreside Fund Services, LLC which is not affiliated with Roundhill Financial Inc., U.S. Bank, or any of their affiliates.
