Self Directed Investor Inc
SDI: "Empowering investors with ideas and education"
Symbol Lookup »  
Topics:ChinaETFsEarningsEconomyEnergyForexGoldIncomeLessonsIdeasTrading

  • Other news: News from PR Newswire
| More

When Apple (AAPL) Swings, Tech ETFs Follow

Tue, Nov 27, 8:16 AM ET, by Michael Johnston

Originally created for buy-and-hold investors looking for cost-effective ways to diversify their portfolios, ETFs have gained popularity among active traders as well; these financial instrument have proven to be responsive and liquid, serving as viable trading vehicles for those looking to implement any number of shorter-term strategies. With innovation also comes complexity, however, and ETFs are no different, as some of these financial instruments bear greater company-specific risk than others [Download Free Report: How To Buy The Right ETF Every Time].

Consumer electronics giant Apple (AAPL) is no stranger to the headlines; this stock is loved by countless active traders given its tendency to stage massive price swings in either direction. Bullish and bearish speculators alike have demonstrated their infatuation with this industry giant as shares of Apple trade upwards of 21 million times every day. Furthermore, many investors maintain heavy exposure to this stock through their technology ETFs whether they realize it or not [see High Tech ETFdb Portfolio].

In fact, of the several dozen ETFs that maintain exposure to Apple, each of the top nine funds feature double-digit allocations to this tech juggernaut. As expected, when Apple’s stock is firing on all cylinders Technology ETFs are usually in green territory; likewise, when shares of Apple are tanking, a large number of tech funds are likely getting dragged into the red [see Why You Never Judge A Fund By Its Cover].

Beware of the Apple Effect

Just how much influence does Apple’s performance have on some of the more concentrated tech ETFs? Short answer: a significant amount. To get a better understanding of the term “company-specific risk,” it pays to take a look at Apple’s performance relative to the ETF that affords the greatest weight to this stock; in this case, the contender is the iShares Dow Jones U.S. Technology Index Fund (IYW, A), which holds Apple in the number one spot, dedicating just over 23% of its total assets to this stock alone.

Click to Enlarge

Consider the performance chart between IYW and AAPL above; it’s fairly evident how this ETF closely tracked the return patterns of shares of Apple leading up to its peak in mid-September. When selling pressures hit Apple, this ETF, not surprisingly, followed lower, although it’s certainly worth noting that it held its ground better than the stock thanks to its (somewhat) diversified portfolio [see also 3 ETF Plays For Technology Growth Stocks Flying Under The Radar].

When it comes to raw performance figures consider the following: since recently peaking at $705.07 a share on September 21, 2012, shares of Apple have shed nearly 16% as of November 26, 2012. By comparison, IYW has lost 9% over this same time period, highlighting the “red” side of the so-called “Apple Effect.” On the other hand, Apple can also have a very positive impact on tech ETFs when shares are climbing; even after its recent correction, Apple is still up 45% year-to-date, while IYW is up just over 10%, once again highlighting the sway that this industry giant has on the technology sector, if not the entire market as a whole [see 101 ETF Lessons Every Financial Advisor Should Learn].

Given the market cap-weighted approach employed by most passive, index-based, exchange-traded funds, having exposure to Apple is more or less inevitable thanks to its sheer size. For those looking to tap into the tech sector while steering clear of major allocations to Apple, there are some products worth a closer look. The Rydex S&P Equal Weight ETF (RSP, B+) allocates roughly 0.20% of total assets to Apple given its equal-weighted strategy while the fundamentally-based First Trust Large Cap Core AlphaDEX Fund (FEX, B) dedicates less than one half of one percent of its portfolio to the well-known behemoth.

[For more ETF analysis, make sure to sign up for our free ETF newsletter or try a free seven day trial to ETFdb Pro]

Follow me on Twitter @SBojinov

Disclosure: No positions at time of writing.

Click here to read the original article on ETFdb.com.


SDI Glossary: "Alpha" Definition
SDI Glossary: "Bullish" Definition
SDI Glossary: "price" Definition
SDI Glossary: "ETFs" Definition
SDI Glossary: "iShares" Definition
SDI Glossary: "Short" Definition
SDI Glossary: "Stock" Definition
This Article's Word Cloud:   AAPL   Apple   Click   ETFdb   ETFs   Effect   Every   Fund   September   Technology   allocations   also   assets   better   exposure   funds   giant   have   into   investors   less   looking   maintain   market   more   number   over   performance   portfolio   risk   shares   some   specific   stock   tech   technology   term   than   thanks   that   their   these   this   those   time   total   traders   weighted   when   while

| More

SPDR S&P Oil & Gas Equipment & Services Breaks Below 200-Day Moving Average - Notable for XES
Tue, May 3, 4:14 PM ET, by ETF Channel

In trading on Tuesday, shares of the SPDR S&P Oil & Gas Equipment & Services ...

DTH Crosses Below Key Moving Average Level
Tue, May 3, 4:14 PM ET, by ETF Channel

In trading on Tuesday, shares of the WisdomTree International High Dividend Fund ETF (DTH) crossed ...

First Trust Global Tactical Commodity Strategy Fund Breaks Below 200-Day Moving Average - Notable for FTGC
Tue, May 3, 4:14 PM ET, by ETF Channel

In trading on Tuesday, shares of the First Trust Global Tactical Commodity Strategy Fund ETF ...

Medtronic Takes Over #120 Spot From Time Warner
Tue, May 3, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

XTN Makes Notable Cross Below Critical Moving Average
Tue, May 3, 11:24 AM ET, by ETF Channel

In trading on Tuesday, shares of the SPDR S&P Transportation ETF (XTN) crossed below their ...

ECON Crosses Below Key Moving Average Level
Tue, May 3, 11:24 AM ET, by ETF Channel

In trading on Tuesday, shares of the EGShares Dow Jones Emerging Markets Consumer Titans 30 ...

VWO, SHI, CCU, VEDL: Large Inflows Detected at ETF
Tue, May 3, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VWO, SHI, CCU, VEDL Exchange traded funds (ETFs) trade just ...

iShares S&P 500 Growth ETF Experiences Big Outflow
Tue, May 3, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IVW, AAPL, MSFT, MO Exchange traded funds (ETFs) trade just ...

Cullen/Frost Bankers a Top Ranked SAFE Dividend Stock With 3.4% Yield (CFR)
Tue, May 3, 8:24 AM ET, by ETF Channel

Cullen/Frost Bankers, Inc. (CFR) has been named to the Dividend Channel ''S.A.F.E. ...

IVZ Named A Top Socially Responsible Dividend Stock
Tue, May 3, 8:14 AM ET, by ETF Channel

Invesco Ltd (IVZ) has been named a Top Socially Responsible Dividend Stock by Dividend Channel, ...

NEAR Makes Notable Cross Below Critical Moving Average
Mon, May 2, 4:14 PM ET, by ETF Channel

In trading on Monday, shares of the iShares Short Maturity Bond ETF (NEAR) crossed below ...

Mallinckrodt Moves Up In Analyst Rankings, Passing Newell Brands
Mon, May 2, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

VBK: Large Outflows Detected at ETF
Mon, May 2, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VBK Exchange traded funds (ETFs) trade just like stocks, but ...

18.5% of MORT Holdings Seeing Recent Insider Buys
Mon, May 2, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Mortgage REIT Income ETF (MORT) shows ...

10.6% of DIA Holdings Seeing Recent Insider Buys
Mon, May 2, 9:34 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SPDR Dow Jones Industrial Average ETF ...

Red Hat Moves Up In Analyst Rankings, Passing Invesco
Fri, Apr 29, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

QQQ, QCOM, TXN, AVGO: ETF Outflow Alert
Fri, Apr 29, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: QQQ, QCOM, TXN, AVGO Exchange traded funds (ETFs) trade just ...

IWD, CSCO, MDT, UTX: ETF Outflow Alert
Fri, Apr 29, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IWD, CSCO, MDT, UTX Exchange traded funds (ETFs) trade just ...

iShares Asia 50 (AIA) Shares Cross Below 200 DMA
Fri, Apr 29, 11:14 AM ET, by ETF Channel

In trading on Friday, shares of the iShares Asia 50 ETF (AIA) crossed below their ...

XLK Crosses Below Key Moving Average Level
Fri, Apr 29, 11:14 AM ET, by ETF Channel

In trading on Friday, shares of the Technology Select Sector SPDR Fund ETF (XLK) crossed ...

EZU: Large Outflows Detected at ETF
Fri, Apr 29, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: EZU Exchange traded funds (ETFs) trade just like stocks, but ...

MLP and Energy Infrastructure ETF -- Insider Buying Index Registering 24.5%
Fri, Apr 29, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the MLP and Energy Infrastructure ETF (MLPX) ...

DUST Crosses Critical Technical Indicator
Thu, Apr 28, 3:54 PM ET, by ETF Channel

In trading on Thursday, shares of the Daily Gold Miners Index Bear 3x Shares ETF ...

Nielsen Holdings Takes Over #15 Spot From Facebook
Thu, Apr 28, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

IGE, OXY, COP, SU: ETF Outflow Alert
Thu, Apr 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IGE, OXY, COP, SU Exchange traded funds (ETFs) trade just ...

SUB: Large Outflows Detected at ETF
Thu, Apr 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: SUB Exchange traded funds (ETFs) trade just like stocks, but ...

TLO: ETF Outflow Alert
Thu, Apr 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: TLO Exchange traded funds (ETFs) trade just like stocks, but ...

XLY, CMCSA, NKE, LOW: ETF Outflow Alert
Thu, Apr 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: XLY, CMCSA, NKE, LOW Exchange traded funds (ETFs) trade just ...

VDE, PAGP, EEQ, TEP: Large Outflows Detected at ETF
Thu, Apr 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VDE, PAGP, EEQ, TEP Exchange traded funds (ETFs) trade just ...

IWV, GOOGL, GOOG, V: ETF Outflow Alert
Thu, Apr 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IWV, GOOGL, GOOG, V Exchange traded funds (ETFs) trade just ...

iShares MSCI Brazil Capped ETF Experiences Big Inflow
Thu, Apr 28, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: EWZ Exchange traded funds (ETFs) trade just like stocks, but ...

VB, NCT, RUSHB: ETF Inflow Alert
Thu, Apr 28, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: VB, NCT, RUSHB Exchange traded funds (ETFs) trade just like ...

REM's Holdings Imply 11% Gain Potential
Thu, Apr 28, 8:44 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

SPDR Barclays Short Term High Yield Bond Breaks Above 200-Day Moving Average - Bullish for SJNK
Wed, Apr 27, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the SPDR Barclays Short Term High Yield Bond ETF ...

ProShares Short VIX Short-Term Futures Breaks Above 200-Day Moving Average - Bullish for SVXY
Wed, Apr 27, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the ProShares Short VIX Short-Term Futures ETF (SVXY) crossed ...

iShares Russell 2000 Growth (IWO) Shares Cross Above 200 DMA
Wed, Apr 27, 3:54 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Russell 2000 Growth ETF (IWO) crossed above ...

VOE: ETF Outflow Alert
Wed, Apr 27, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VOE Exchange traded funds (ETFs) trade just like stocks, but ...

iShares U.S. Pharmaceuticals ETF Experiences Big Outflow
Wed, Apr 27, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IHE, BMY, LLY, AGN Exchange traded funds (ETFs) trade just ...

TLH: Large Outflows Detected at ETF
Wed, Apr 27, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: TLH Exchange traded funds (ETFs) trade just like stocks, but ...

iShares Morningstar Large-Cap Growth (JKE) Shares Cross Below 200 DMA
Wed, Apr 27, 10:54 AM ET, by ETF Channel

In trading on Wednesday, shares of the iShares Morningstar Large-Cap Growth ETF (JKE) crossed below ...

JNK: Large Outflows Detected at ETF
Wed, Apr 27, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: JNK Exchange traded funds (ETFs) trade just like stocks, but ...

SPDR Barclays High Yield Bond (JNK) Shares Cross Above 200 DMA
Wed, Apr 27, 10:54 AM ET, by ETF Channel

In trading on Wednesday, shares of the SPDR Barclays High Yield Bond ETF (JNK) crossed ...

WisdomTree SmallCap Dividend Fund -- Insider Buying Index Registering 18.0%
Wed, Apr 27, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the WisdomTree SmallCap Dividend Fund (DES) shows ...

17.9% of FYT Holdings Seeing Recent Insider Buys
Wed, Apr 27, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the First Trust Small Cap Value AlphaDEX ...

FPX's Holdings Could Mean 14% Gain Potential
Wed, Apr 27, 8:14 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

Implied RZG Analyst Target Price: $91
Wed, Apr 27, 8:14 AM ET, by ETF Channel

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, ...

FAZ Crowded With Sellers
Tue, Apr 26, 4:19 PM ET, by ETF Channel

In trading on Tuesday, shares of the Daily Financial Bear 3x Shares ETF (FAZ) entered ...

See How Boeing Ranks Among Analysts' Top Dow 30 Picks
Tue, Apr 26, 11:54 AM ET, by ETF Channel

A study of analyst recommendations at the major brokerages shows that Boeing Co. (BA) is ...

PG&E Takes Over #62 Spot From Constellation Brands
Tue, Apr 26, 11:54 AM ET, by ETF Channel

In a study of analyst recommendations at the major brokerages, for the underlying components of ...

XHB, WHR, FBHS, OC: Large Outflows Detected at ETF
Tue, Apr 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: XHB, WHR, FBHS, OC Exchange traded funds (ETFs) trade just ...

  More articles:  1 2 3 4 5 6 7 next »

ABOUT US »   ADVERTISE »   CONTACT US »   TERMS OF USE & PRIVACY POLICY »

When Apple (AAPL) Swings, Tech ETFs Follow | Self Directed Investor | Copyright © 2008 - 2016, All Rights Reserved

Any ideas and opinions presented in Self Directed Investor content are for informational and educational purposes only, and do not reflect the opinions of BNK Invest, Inc. or any of its affiliates, subsidiaries or partners. In no way should any content contained herein be interpreted to represent trading or investment advice. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. All site visitors agree that under no circumstances will BNK Invest, Inc,. its subsidiaries, partners, officers, employees, affiliates, or agents be held liable for any loss or damage caused by your reliance on information obtained. Read Full Disclaimer.

SDI is associated with: ValueForum.com -- a subscription-based online social networking forum of serious individual investors. | MarketNewsVideo.com -- videos appearing on SDI are produced by Market News Video. | TickerTech.com -- stock quote content appearing on SDI is at least 20 minutes delayed and is powered by Ticker Technologies. | GoldStockStrategist.com -- Edited by Scott V. Nystrom, PhD, Gold Stock Strategist provides analysis on gold mining companies.