U. S. companies continue to stockpile cash at an impressive clip. Citing Moody’s Investors Service, Barron’s reports that at the end of 2014 cash and equivalent securities for U.S. companies climbed 4% to $1.73 trillion.
The top five U.S. corporate cash hoards combine for a quarter of the total balance, according to Barron’s. Four of those five are technology companies with Dow component and pharmaceuticals giant Pfizer (NYSE: PFE) the outlier.
Investors opting to access cash-rich firms via exchange traded funds can opt for the funds such as the Health Care Select Sector SPDR (NYSEArca: XLV) and the Vanguard Health Care ETF (NYSEArca: VHT), both of which feature Pfizer as the second-largest holding. [Cash Rush to Healthcare ETFs]
The other cash juggernauts, as of the end of last year, according to Moody’s by way of Barron’s, are Apple (NasdaqGM: AAPL), Microsoft (NasdaqGM: MSFT), Google (NasdaqGM: GOOGL) and Cisco (NasdaqGM: CSCO).
Accessing those tech behemoths and their giant war chests is easy with popular ETFs, such as the Technology Select Sector SPDR (NYSEArca: XLK), iShares U.S. Technology ETF (NYSEArca: IYW) and the PowerShares QQQ (NasdaqGM: QQQ), the Nasdaq-100 (NDQ) tracking ETF.
At the end of last year, Apple had $178 billion in cash and marketable securities, but that number has since grown to $194 billion. It cannot be said that the California-based company is being stingy with its cash. When the company recently delivered fiscal second-quarter earnings, it also announced it is boosting its quarterly dividend to 52 cents a share from 47 cents while increasing its share repurchase program to $140 billion. http://www.etftrends.com/2015/04/apples-expanded-buyback-doesnt-nudge-buyback-etfs/
XLK, the largest tech sector ETF by assets, has a 17.8% weight to Apple while Microsoft, Google and Cisco combine for over 20% of the ETF’s weight. IYW allocates 20.4% to Apple with Microsoft, Google and Cisco combining for another 23.3% of the ETF’s weight. All four of those stocks are members of the Nasdaq-100. QQQ devotes about 28% of its weight to the quartet.