Apple Inc. (AAPL) Stock Repurchases Puts Buyback ETF In Focus [PowerShare Buyback Achievers Fund (ETF)]

PKW in Focus

PKW tracks the NASDAQ U.S. Buyback Achievers Index, holding a basket of 177 securities. The fund manages an asset base of $2.5 billion, charging 60 basis points as fees to investors.

Though Apple is currently not a part of PKW, its aggressive share repurchase policy might make it a likely candidate for inclusion in the fund, should the buyback ever reach the 5% threshold.  The fund is rebalanced quarterly, with the next rebalancing due in April.

The fund already has the second largest exposure to Tech stocks, allocating 16.9% of the total fund assets. Consumer Discretionary stocks dominate the fund, having around one-third of the total fund exposure.

Also, among the top ten holdings of the fund, the tech stocks Oracle (ORCL) andYahoo (YHOO) together have around 7.4% exposure in the fund (read: Yahoo Share Buyback Plan Put These ETFs in Focus).

The fund’s niche strategy has enabled it to outperform broader market indices since its inception. The ETF has been outperforming the broader markets over the last five years. In comparison to the S&P 500’s return of around 32% last year, PKW returned an outstanding 45.6%.

Bottom Line

Apple’s recent buybacks bring to focus the fact that this might be the most preferred way of corporate firms for returning cash to shareholders this year as well. If that be so, the above mentioned fund might continue to outperform the market, and be an interesting selection for investors seeking a broad market play with a twist.

This article is brought to you courtesy of Eric Dutram.

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