The effects of the coronavirus are already manifesting themselves in one of the global tech giants, which puts certain ETFs on watch. Lower iPhone supply globally and weakened China demand will hurt Apple’s revenue projections for the fiscal second quarter.
Per a CNBC report, Apple “expected to report net sales between $63 billion to $67 billion in its fiscal second quarter. Apple did not provide a new forecast for its fiscal second-quarter revenue on Monday. The company said it provided a wider range than usual in late January, citing the uncertainty around the coronavirus outbreak.”
“As you can see from the range, anticipates some level of issue there. Otherwise, we would not have a $4 billion range,” CEO Tim Cook said at the time.
Apple manufactures the majority of iPhones in China. As a result of the coronavirus, the company had to temporarily halt production as well as close a number of retail stores amid the rising number of coronavirus cases at the height of its contagion.
Even as the media is reporting a lesser number of coronavirus cases, Apple said that a return to normalcy won’t be immediate even if the effects of the virus dwindle. On Monday, Apple said it’s “experiencing a slower return to normal conditions than we had anticipated.”
Here are four ETFs to consider with the heaviest weighting of Apple stock:
- 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.
- 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.
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