Tuesday's big news in the technology sector will likely center
around the unveiling of Apple's (NASDAQ:
) iPhone 5S, the latest version of the popular smartphone.
New product announcements from Apple have arguably lacked the
excitement that was so evident when Steve Jobs was at the helm of
the tech giant.
Then again, recent entrants to shares of Apple probably are
not complaining. Once again the largest U.S. company by market
value, Apple has surged nearly 24 percent since the start of
July. That has been good news for some of the ETFs with large
allocations to the stock, but investors in those funds will
undoubtedly be hoping Apple ETFs perform far better this year
after the new iPhone is unveiled than after the iPhone 5 was
introduced last year.
A Guide To How Some ETFs May React Post-Apple
Technology Select Sector SPDR (NYSE:
) The $11.4 billion XLK is the largest tech ETF by assets and it
does not skimp on its exposure to Apple. California-based Apple
is 15.3 percent of XLK's weight, nearly double the weight given
to XLK's second-largest holding, Google (NASDAQ:
Although Google and several other top-10 holdings in XLK have
been solid performers this year, XLK still ranks in the bottom
half in terms of year-to-date performance
among the nine sector SPDRs ETFs
. That alone is enough reason for investors to hope XLK improves
upon the eight percent loss it incurred after the iPhone 5 was
introduced through the end of 2012.
Vanguard Information Technology ETF (NYSE:
) With an expense ratio slightly below XLK's, the Vanguard
Information Technology ETF is cheapest tech ETF on the market
today. Its exposure to Apple is also well below that of XLK. VGT
allocated 12 percent to the iPad maker at the end of the second
according to Vanguard data
Large ETF weights to Apple
have been proven to cut both ways
and when the stock fell after the iPhone 5 introduction, VGT was
a little less bad than XLK with a loss of 7.1 percent.
Year-to-date, VGT has outpaced XLK by 340 basis points.
iShares U.S. Technology ETF (NYSE:
) Although the iShares U.S. Technology ETF has over $2.4 billion
assets, the fund is often forgotten in the Apple ETF
conversation. That is perplexing because IYW has one of the
largest Apple weights of any ETF
At 18.3 percent, Apple is nearly twice as important IYW's
fortunes as Google, the ETF's second-largest holding. Since IYW
often carries the larges weight to Apple, it was noticeably worse
than XLK or VGT after last year's iPhone announcement, losing 8.7
percent through the end of the year. However, IYW has gained 6.6
percent since the start of July.
iShares Global Tech ETF (NYSE:
) How "global" the iShares Global Tech ETF is is up for debate
because the U.S. accounts for 78 percent of the fund's country
weight. Still, IXN is a credible Apple ETF because, like XLK and
IYW, the stock's weight in this ETF is nearly twice that of
Google. Apple accounts for 13.6 percent of IXN's weight, more
than triple the allocation given to the company's bitter rival,
IXN fell 4.2 percent through year end following the 2012
iPhone introduction, but the $557.4 million ETF is up 11.3
percent this year.
For more on ETFs, click
Disclosure: Author does not own any of the securities
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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