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Is Apple Behind New Fund Flows Into Large Cap Growth ETFs?

20 September 2011 at 2:38 pm by Gary Gordon     Bookmark and Share    Follow EtfExpert on Twitter

In spite of significant corrective activity in U.S. stock assets… in spite of¬†bears clawing away at a number of foreign stock assets…¬†the most popular company on the planet¬†remains unharmed. In fact, shares of Apple¬†hit a new all-time high on¬†September 20, 2011.

Everyone is “gaga” for Apple stock. That includes you, me… even the guy who takes my clothes at the dry cleaners. The only question is whether or not the universal love for Apple will result in a single-stock bubble. (Maybe when it hits $500 per share, but I don’t think we’ve arrived just yet.)

Many ETF investors¬†get their Apple fix through¬†PowerShares NASDAQ 100 (QQQ). The “Qs” are a popular tool for those who want to maintain an “i-focus,” while still gaining access to¬†fast-rising growth machines.

In a world where more than 100¬†ETFs claim a piece of Apple’s pie, one can structure his/her love affair from as much exposure (17.5% via iShares DJ Technology) to as little exposure (0.25% in Rydex Equal Weight S&P 500) as one requires. I suspect, though, that institutional money managers are hedging towards a higher weighting.

For instance, volume for¬†the SPDR S&P 500 Trust (SPY) was below average on September 20.¬†And yet, one institutional investor (or a few institutional investors) snapped up $350 million of iShares Russell 1000 Large Cap Growth (IWF) on 5x the normal trading volume. The voluminous activity¬†increased IWF’s assets under management by nearly 3%.

An isolated incident? Perhaps.

Yet¬†recent¬†semiconductor stock gains as well as new highs in Apple shares tell me that¬†riders have already boarded the Q4 tech train. (Tech has a long history of relative outperformance in Q4). What’s more, IWF has a 6% weighting in Apple; that’s¬†a¬†bit more juice than¬†the 3.5% represented in SPY.

Below you will find eight other ETFs with more than a 5% weighting in the almighty Apple. For a bit of perspective, you may want to read my Apple commentary from March, 2010. Find out just how much more influential Apple is today than 18 months earlier!   

Eight Popular ETFs With Huge Exposure To Apple (AAPL)
           
          % Weighting
iShares DJ Technology (IYW)     17.40%
SPDR Select Technology (XLK)     15.60%
PowerShares NASDAQ 100 QQQ (QQQ)   15.10%
iShares Global Technology (IXN)     13.26%
Vanguard Information Technology (VGT)   12.00%
iShares Morningstar Large Cap Growth (JKE) 11.38%
iShares GS Technology Sector (IGM)   10.75%
Vanguard Mega Cap 300 Growth (MGK)   6.00%

 

You can listen to the¬†ETF Expert Radio¬†Show¬†‚ÄúLIVE‚ÄĚ,¬†via podcast or on your iPod.¬†You can follow me on Twitter @ETFexpert.

Disclosure Statement: ETF Expert¬†is a web log (‚ÄĚblog‚ÄĚ) that makes the world of ETFs easier to understand. Gary Gordon, MS, CFP is the president of Pacific Park Financial, Inc., a Registered Investment Adviser with the SEC. Gary Gordon, Pacific Park Financial, Inc, and/or its clients may hold positions in the ETFs, mutual funds, and/or any investment asset mentioned above. The commentary does not constitute individualized investment advice. The opinions offered herein are not personalized recommendations to buy, sell or hold securities. At times, issuers of exchange-traded products compensate Pacific Park Financial, Inc. or its subsidiaries for advertising at the ETF Expert web site. ETF Expert content is created independently of any advertising relationships. You may review additional ETF Expert disclosure details here.

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