Will Amazon’s New Music Store Help or Hurt Technology ETFs?
September 30th at 8:00am by Tom Lydon
Technology exchange traded funds (ETFs) could be in for a shakeup as Amazon.com (AMZN) unveiled its highly anticipated digital music store, Amazon MP3, with nearly 3.2 million songs. The store, which opened early last week, allows shoppers to buy and download individual songs or entire albums, the Associated Press reports. The downloaded tracks can be played on most personal computers and portable music devices, including Apple’s (AAPL) popular iPod and Microsoft’s (MSFT) Zune.
The Amazon store was designed to compete against Apple’s iTunes for iPods, which leads consumers and investors to wonder how that competition will impact ETFs that hold Apple and Microsoft. A couple ETFs that have Apple and Microsoft in their top holdings include Technology Select Sector SPDR (XLK) and iShares S&P Global Technology (IXN). Currently, XLK is up 16.7% year-to-date, and IXN is up 15.0% year-to-date.
