Equal-Weight Tech ETFs if You’re Shy About Apple
October 12th, 2012 at 3:03pm by Tom Lydon
Apple (NasdaqGS: AAPL), a major holding in technology exchange traded funds, is down more than 3% this week. If you’re shy about Apple’s dominant effect on an investment portfolio, equal-weight tech ETFs provide a more balanced approach to the sector.
Apple shares were down 1.6% Thursday and dropped 4.6% over the past week, trading down to $630 per share from their all-time high of just over $705 per share last month. With a market capitalization of $591.3 billion, the single company stock is one the largest holdings in market-cap weighted tech sector ETFs:
- iShares Dow Jones US Technology (NYSEArca: IYW): Apple is 24.1%.
- Vanguard Information Technology Index Fund (NYSEArca: VGT): Apple is 20.4%.
- Select Sector SPDR Technology (NYSEArca: XLK): Apple is 20.4%.
- PowerShares QQQ ETF (NYSEArca: QQQ): Apple is 19.6%.
Investors, though, can protect themselves from the potential Apple effect on tech ETF through funds that adhere to an equal weight methodology:
- Guggenheim S&P Equal Weight Technology ETF (NYSEArca: RYT): Apple is 1.4%.
- First Trust NASDAQ-100 Equal Weighted Index Fund ETF (NYSEArca: QQEW): Apple is 1.0%.
- First Trust Nasdaq-100 Tech Index (NYSEArca: QTEC): Apple is 2.2%.
- Direxion NASDAQ-100 Equal Wtd Idx Shrs ETF (NYSEArca: QQQE): Apple is 0.9%.
Since holdings are more or less evenly spread out, the tech sector ETFs provides a heavier emphasis on mid- and small-cap stocks. The Nasdaq-100 equal weight ETFs provides equal exposure to the 100 large-cap growth firms listed on the Nasdaq. [Chart of the Day: Apple and Tech ETFs]
For more information on the tech sector, visit our technology category.
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.