Apple Inc. (AAPL) stock is weighing on equities today, down more than 2% in early trading, and we see headlines in relation to cellular connectivity in China being dropped altogether for users of Apple Watch Series 3.
Being the largest stock in the S&P 500 (SPX) in terms of market capitalization with a 3.76% weighting (#2 weighting MSFT carries a 2.72% weighting), today’s move has caught many by surprise with the stock slicing through its 50 day MA after an impressive rally since the beginning of October.
Of course, with or without today’s move, the event that everyone is really looking forward to is AAPL’s anticipated quarterly earnings release on 11/2 after the bell. The Dow Jones Industrial Average (DJIA), being a price weighted index as it is, carries a much smaller weighting to AAPL than market capitalization weighted indexes such as the S&P 500. AAPL is actually the seventh largest holding within the index and tracking fund DIA (SPDR Dow Jones Industrial Average, Expense Ratio 0.17%) behind the following companies in reverse order: HD, MCD, UNH, MMM, GS, and BA.
We have mentioned in past pieces, but it is helpful to repeat this especially going into a potentially impactful earnings season given the recent volatility in AAPL stock, the ETFs that have the heaviest single concentrations to the stock are as follows: IYW (iShares U.S. Technology, Expense Ratio 0.44%, 16.87% weighting), XLK (SPDR Technology Select Sector, Expense Ratio 0.14%, 14.59% weighting), JKD (iShares Morningstar Large Cap, Expense Ratio 0.20%, 13.87% weighting), FTEC (Fidelity MSCI Information Technology, Expense Ratio 0.08%) and VGT (Vanguard Information Technology, Expense Ratio 0.10%).
Additionally, investors that may be looking to temper their exposure to AAPL but still want to participate in “Technology” oriented sector ETFs can potentially look at Equal-Weighted products such as QQEW (First Trust NASDAQ 100 Equal Weight, Expense Ratio 0.60%) and QQQE (Direxion NASDAQ-100 Equal Weighted, Expense Ratio 0.35%).
Furthermore, there is actually an equal-weighted Dow product now listed known as EDOW (First Trust Dow 30 Equal Weight, Expense Ratio 0.50% which debuted a bit over two months ago in early August ($2.1 million in AUM).
Apple Inc. (AAPL) was trading at $155.54 per share on Thursday morning, down $4.22 (-2.64%). Year-to-date, AAPL has gained 35.97%, versus a 15.19% rise in the benchmark S&P 500 index during the same period.
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 Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.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.