Boring beats brilliant: UK’s overlooked sectors leave Magnificent 7 trailing in 2026 

Investors who ignored the hype around the Magnificent 7 and instead backed some of the FTSE 350’s least glamorous sectors have enjoyed returns up to 21 percentage points higher this year, according to new analysis from investing and trading platform IG.

The findings come as investors await quarterly earnings from four of the Magnificent 7 this week, with markets increasingly focused on whether massive AI spending can continue to justify lofty valuations.

After dominating markets for much of the past two years, the Magnificent 7 – Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta and Tesla – have slipped 1.2% year-to-date in sterling terms, as investors rotate into more defensive parts of the market.

By contrast, several of the FTSE 350’s most overlooked sectors have comfortably outperformed. Industrial Metals has surged 20.0%, followed by Telecommunications (+13.7%), Utilities (+5.9%) and Consumer Staples (+2.0%), highlighting a broad rotation away from the market’s biggest technology names.

Table showing investment returns for Magnificent 7 against FTSE 350, YTD:

Source: Bloomberg data YTD (January 1st – July 27th)

A £10,000 investment at the start of the year highlights the scale of the shift. An investor holding the Magnificent 7 would now have £9,878, while the same investment in the FTSE 350 Industrial Metals Index would be worth £12,000 – more than £2,100 ahead in less than eight months. Even a £10,000 investment in the traditionally defensive FTSE 350 Utilities Index would now be worth £10,586, outperforming the Magnificent 7 by more than £700.

Chris Beauchamp, Chief Market Analyst at IG, said: “No investment theme works all the time. The ‘Magnificent 7’ moniker has felt out of date for a while, given the decidedly mixed performance of some members of this once-illustrious group, and this data underlines the fact that this group of seven big names is not powering the market as it once did.”

“Indeed, as fears about over-valuation and huge cash burn continue to play on investors’ minds, the group has seen its performance lag behind other much less exciting sectors. This is not to suggest that the Magnificent 7 are doomed to fall further and further behind, but it is a reminder to investors that they shouldn’t become too attached to one sector or theme.”

Methodology

IG compared the year-to-date performance (1 January-27 July 2026) of an equal-weighted basket comprising Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta and Tesla with selected FTSE 350 sector indices. Returns are shown in sterling terms. 

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