It is only mild hyperbole to say that nearly everyone with a
television or Internet access, at least those in the U.S., know
by now that shares of Apple (NASDAQ:
) are being taken to the woodshed today. The iPad maker, once a
$700+ stock, is down 11.7 percent and trading below $454 as of
As has been duly noted,
Apple's tumbles impact those ETFs with large
allocations to the stock
. For example, the iShares Dow Jones U.S. Technology Sector Index
), which allocates almost 20 percent of its weight to Apple, is
off 2.2 percent today.
The PowerShares QQQ (NASDAQ:
) is lower by 1.4 percent while the Technology Select SPDR (NYSE:
) is lower by 1.7 percent. Those funds devote 15.2 percent and
16.5 percent of their respective weights to Apple.
Those slack performances do not mean that all technology
are being dragged lower. In fact, one small tech ETF has been on
a tear lately, benefiting in part from the fact that it offers no
exposure to Apple at all. That ETF is the PowerShares NASDAQ
Internet Portfolio (NASDAQ:
Home to just $52.2 million in assets under management and
average daily volume of just 11,750 shares, PNQI is one of those
ETFs that AUM and volume critics love to hate. Too bad for them.
PNQI is higher by nearly 1.9 percent today on volume that has
already eclipsed the daily average. A new 52-week high has been
touched along the way.
Ignoring PNQI has proven costly. The ETF
was highlighted as an avenue
for playing high momentum Internet names such as Baidu (NASDAQ:
), Google (NASDAQ:
) and Amazon (NASDAQ:
) in mid-September and has returned almost seven percent in that
Factoring in today's loss, Apple has plunged more than 28
percent over the past 90 days. That means QQQ and XLK are barely
in the green over the same time. Proving its worth as a viable
way to gain exposure to a basket of triple-digit Nasdaq darlings,
PNQI is about 11.6 percent, including today's gain, since October
Still, those that confuse an ETF's liquidity with its average
daily volume are apt to shy away from PNQI. That is despite the
fact that of PNQI's top-10 holdings, which combine for over 59
percent of the fund's weight, the LEAST heavily traded of those
names is Equinix (NASDAQ:
) with average daily turnover north of 866,000 shares per
It must also be noted that in 2012's 250 trading days, the
midpoint of PNQI's bid/ask spread was never excessively above or
below the ETF's net asset value,
according to PowerShares data
. Translation: The PowerShares data indicate that on not one
trading day last year did the midpoint of PNQI's bid/ask spread
even go beyond a 50-basis point premium to the ETF's NAV.
With Amazon, Equinix and Priceline.com (NASDAQ:
), a combined 19.8 percent of PNQI's weight, due to report
earnings over the next several weeks, the ETF has catalysts
remaining to continue attacking new all-time highs and shed its
anonymous status in the process.
For more on ETFs, click
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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