AAPL, of course, has the highest weighting in this market capitalization-weighted ETF at 10.48%, and we note that AAPL also has the largest weighting in the S&P 500 — and linked ETF SPY (SPDR S&P 500, Expense Ratio 0.09%, 3.08% AAPL weighting). With the world’s largest stock in terms of market capitalization rising more than 6.4% in just the trailing five day period, this begs the question of what ETFs are benefitting the most from AAPL’s weighting, given the specific index construction of said funds.
The answer? IYW (iShares U.S. Technology, Expense Ratio 0.43%, $2.7 billion in AUM) has the largest weighting to AAPL, with a substantial 15.53% slug dedicated to the stock presently.
Other heavyweights in terms of AAPL exposure include XLK (SPDR Technology Select Sector, Expense Ratio 0.14%, 13.01% weighting), VGT (Vanguard Information Technology, Expense Ratio 0.14%, 12.58% weighting), FTEC (Fidelity MSCI Information Technology, Expense Ratio 12.56% weighting), TCHF (iShares Edge MSCI Multifactor Technology, Expense Ratio 0.35%, 11.70% weighting), IXN (iShares Global Technology, Expense Ratio 0.47%, 11.52%), and QYLD (Recon Capital NASDAQ 100 Covered Call, 10.48% weighting).
Of course, those that may believe that AAPL stock has rallied too far, too quickly, and are looking to pare down single stock exposure here but still have a position in an index like the Nasdaq 100, there are several “Equal-Weighted” products in this specific niche that we have pointed out in this piece before, but are perhaps more relevant now than ever given AAPL’s recent volatility.
QQEW (First Trust NASDAQ-100 Equal Weighted, Expense Ratio 0.60%) immediately comes to mind as does QQQE (Direxion NASDAQ-100 Equal Weighted, Expense Ratio 0.35%). These funds are not huge in terms of asset size, with $370 million and $59.5 million invested in them respectively, but they may stand out as interesting alternatives given the recent AAPL move.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.