Slowing Buybacks Slow Buyback ETFs

Technology remained the leading sector for share repurchases in the second quarter, though its percentage of S&P 500 buybacks slipped to 26.3% from 30.9% in the first quarter, according to S&P Dow Jones Indices. The aforementioned ETFs are reflective of tech’s buyback dominance. PKW has a 16.3% weight to tech stocks while SYLD allocates 18% to the sector. TTFS has a 23% tech weight. [Float Shrink ETF Matures]

Apple (NasdaqGS: AAPL) led second-quarter S&P 500 buybacks at $5 billion, though as has been previously noted, the company did not reduce its shares outstanding total by enough last year to gain entry to PKW this year.

International Business Machines (NYSE: IBM), the second-largest S&P 500 share repurchaser in the second quarter at $3.66 billion, does not appear in PKW or SYLD. TTFS, like SYLD, is an equal-weight ETF and has roughly 1% weights to Apple and IBM. SYLD has 1.1% weight to Apple. [IBM Isn’t a Factor in Buyback ETFs]

Of the top-10 S&P 500 share repurchasers in the second quarter, only Home Depot (NYSE: HD) and Oracle (NYSE: ORCL) appear in PKW’s top-10 holdings. Those stocks combine for 10.4% of the ETF’s weight.

PowerShares Buyback Achievers Portfolio



Tom Lydon’s clients own shares of Apple and TTFS.