Technology giant Apple Inc. ( AAPL ) saw incredible sales for the new 3D touch iPhones thanks to buyers' growing demand for new and enhanced smartphones. This is especially true as the company sold a record 13 million iPhone 6s and 6s Plus handsets in the first weekend of its availability in retail stores (read: Is the Nightmare Over for Tech ETFs Post Market Crash? ).
The numbers were at the high end of analysts' expectation of 12-13 million iPhones sales and clearly outpaced last year's record of 10 million sales for iPhone 6 and 6 Plus. Chief Executive Officer Tim Cook said that "sales for iPhone 6s and iPhone 6s Plus have been phenomenal, blowing past any previous first weekend sales results in Apple's history." Sales were benefitted by the availability of iPhones in the Chinese markets, which was untapped last year due to delays in regulatory approvals.
Given the blockbuster sales, Apple announced that the new handsets would be available in more than 40 additional countries, including Italy, Mexico, Russia, Spain and Taiwan by October 9 and in three more countries - India, Malaysia and Turkey - by October 16. The company expects the devices to be available in over 130 countries by the end of the year.
While the appearance of iPhone 6s and 6s Plus is identical to the last year's model, the new models have more memory and faster processors with improved features including 3D Touch display, a 12 megapixel camera and Live Photos. These enhanced features have attracted more customers and are likely to continue doing so in the coming months. This is turn will brighten the company's revenues and profitability.
Apple currently has a Zacks Rank #3 (Hold) with a triple play aspect. It has a Growth and Momentum style score of 'A' each while Value score is 'B'. This suggests that Apple has the potential to grow in the coming months (read: Apple Fails to Impress: Should You Still Buy its ETFs? ).
Investors looking to tap this opportunity with a much lower risk could invest in the ETF world. Though there are several options available in the market to make a bet on Apple, we have highlighted four ETFs with heavy exposure to this tech giant. These products have superior ranking methodologies with the Zacks ETF Rank of 2 or 'Buy' rating with a Medium risk outlook.
iShares Dow Jones US Technology ETF ( IYW )
This ETF tracks the Dow Jones US Technology Index, giving investors exposure to the 147 technology stocks. The fund has AUM of $2.5 billion while charging 43 bps in fees and expenses. Volume is good as it exchanges nearly 279,000 shares in hand a day. Apple occupies the top position in the basket with 19.7% of assets. About half of the portfolio is allocated to software and services while technology hardware and equipment accounts for 34% share.
Select Sector SPDR Technology ETF ( XLK )
This most popular technology ETF follows the S&P Technology Select Sector Index and has more than $11.5 billion in AUM. This fund trades in heavy volume of roughly 9.3 million shares and charges 15 bps in fees per year from investors. In total, the fund holds about 76 securities in its basket. Of these firms, AAPL takes the top spot, making up roughly 16.7% of the assets. In terms of industrial exposure, the fund is widely spread across hardware storage & peripherals, software, IT services, Internet software & services, and diversified telecom services that make up for a double-digit allocation each (see: all the Technology ETFs here ).
Vanguard Information Technology ETF ( VGT )
This fund manages about $7.3 billion in its asset base and provides exposure to a large basket of 383 technology stocks by tracking the MSCI US Investable Market Information Technology 25/50 Index. The ETF has 0.12% in expense ratio while volume is good at nearly 318,000 shares. Here again, AAPL is the top firm with 15.6% allocation. The product is well spread out across a number of sectors with hardware & storage, software & services, system software, data processing & outsourced services, and semiconductors each accounting for a double-digit allocation.
PowerShares QQQ ETF ( QQQ )
This fund tracks the Nasdaq-100 Index, which measures the performance of the largest domestic and international non-financial companies listed on the Nasdaq Stock Market based on market capitalization. Holding 109 stocks, Apple is the top firm accounting for 13.6% share in the basket. While information technology dominates the fund's portfolio with 55.4% share, consumer discretionary and health care account for a double-digit exposure each (read: 5 Hot ETFs Post Fed Meeting ).
QQQ is one of the largest and most popular funds in the large-cap space with AUM of $36.9 billion and average daily volume of more than 32.7 million shares. It charges 20 bps in annual fees.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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