With the capital markets in the throes of more panic selling amid the coronavirus outbreak, it’s a good time for bargain hunters to load up on technology names that have been driving the extended bull market the past decade. Low prices in tech giants like Apple can allow investors to get in on a buy-and-hold strategy for the next 5 to 10 years, which puts exchange-traded funds (ETFs) that hold these names on watch.
Apple is no doubt feeling the pangs of a supply chain disruption as a result of the coronavirus, but once this comes to pass, it could set up more demand for its bread-and-butter product—the iPhone.
″While the supply chain issues and China demand shift are near-term fundamental headwinds, our primary focus is that the first part of this massive upgrade opportunity on the horizon with 5G leading the way should still be in the 215 million to 220 million unit range looking out to FY21,” said Wedbush Securities analyst Dan Ives. “At the end of the day, while the supply chain and demand will move around over the coming quarters, we believe Apple based on shifting timing could potentially ship north of 231 million iPhones in FY21 in an upside scenario, which will break its previous record set in FY15.”
Investors looking to pick up some ETFs with Apple holdings include the following:
- Fidelity MSCI Information Technology Index ETF (FTEC): tries to reflect the performance of the Nasdaq-100 Technology Sector Index, which consists of companies in the Nasdaq-100 Index classified as technology according to the Industry Classification Benchmark. QTEC currently holds 34 components and more-or-less equally weights its holdings.
- Vanguard Information Technology ETF (NYSEArca: VGT): tries to reflect the performance of the MSCI US IMI Information Technology 25/50 Index, which includes information technology stocks in the MSCI US IMI 25/50.
- Technology Select Sector SPDR ETF (NYSEArca: XLK): tries to reflect the performance of the Technology Select Sector Index, which is comprised of technology and telecom sector of the S&P 500. The ETF includes companies from technology hardware, storage, and peripherals; software; diversified telecommunication services; communications equipment; semiconductors and semiconductor equipment; internet software and services; IT services; electronic equipment, instruments, and components; and wireless telecommunication services.
- iShares U.S. Technology ETF (NYSEArca: IYW): reflects the performance of the Dow Jones U.S. Information Technology Index, which includes all tech sector picks in the Dow Jones U.S. Index. Due to the Dow Jones’ classification of information tech names, healthcare technology stocks may be included while payment technology stocks are excluded.
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