Investors are adding to their mega-caps exposure following strong first quarter earnings reports and a rosier economic outlook.
Apple Inc. (AAPL) was the latest big tech company to report earnings that beat Wall Street’s estimates, reporting an all-time record in services and a March-quarter record for the iPhone, sending shares of the company higher on Friday.
“The U.S. stock market has been led recently by mega-cap companies benefiting from their scale and ability to grow fast,” said Todd Rosenbluth, VettaFi’s head of research. “Apple was just the latest company to report stronger than expected earnings this week.”
See more: “Invesco Multi-Factor ETF OMFL Sees Spike in Flows”
Apple is the top holding in the Invesco S&P 500 Top 50 ETF (XLG). This fund offers exposure to the 50 largest securities by market capitalization in the Russell 3000 universe. Effectively, XLG delivers concentrated exposure to U.S. mega-cap stocks, something investors increasingly have sought as mega-caps post impressive YTD gains.
XLG took in $276 million in net flows in April, a sharp pivot from the outflows observed during the first quarter. Between January 1 and March 31, XLG saw $171 million in net outflows. In 2022, the fund saw $43 million in net outflows, according to ETF Database.
Over 51% of XLG by weight is in the top 10 securities, whereas the top 10 securities in the S&P 500 comprise approximately 27% of the index by weight. Approximately 62% of XLG by weight is in the top 15 securities.
XLG has $2.2 billion in assets under management and charges 20 basis points.
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