Apple’s (NasdaqGS: AAPL) market cap has grown so large that the stock accounts for more than 20% of some exchange traded funds tracking the technology sector.
For example, Apple alone represents 20.1% of iShares Dow Jones US Technology (NYSEArca: IYW), which holds about $1.6 billion in assets.
Apple shares traded over $550 on Monday to a new all-time high. The company’s market cap exceeds $500 billion.
“This astonishing public valuation has had some unexpected effects that investors should be aware of: chief among them is the risk of overconcentration, as a great many indices and the ETFs that track them are weighted by market cap,” writes Dave Fry at ETF Digest.
Apple shares have rallied nearly 40% the past three months.
Fry points out that Guggenheim S&P 500 Equal Weight Technology (NYSEArca: RYT) is one sector ETF that isn’t dominated by Apple because it uses an equal-weighted strategy rather than market cap.
Here are some other ETFs with large stakes in Apple, according to XTF.com:
- PowerShares QQQ (NasdaqGM: QQQ): 17.4%
- Vanguard Information Technology (NYSEArca: VGT): 17.1%
- Technology Select Sector SPDR (NYSEArca: XLK): 17.6%
Full disclosure: Tom Lydon’s clients own AAPL.
Story updated to correct RYT fund name.