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:   Apple   ETFdb   ETFs   Effect   Every   Fund   Technology   active   allocations   also   assets   based   comes   exposure   financial   free   funds   giant   given   have   highlighting   industry   into   just   less   looking   market   more   number   over   performance   portfolio   shares   some   stock   tech   technology   term   than   that   their   this   those   time   total   traders   well   when   while   worth

| More

PZD Makes Notable Cross Below Critical Moving Average
Mon, Jul 28, 4:14 PM ET, by ETF Channel

In trading on Monday, shares of the PowerShares Cleantech Portfolio ETF (PZD) crossed below their ...

KOLD Crosses Above Key Moving Average Level
Mon, Jul 28, 4:14 PM ET, by ETF Channel

In trading on Monday, shares of the Proshares UltraShort Bloomberg Natural Gas ETF (KOLD) crossed ...

Honeywell International Takes Over #47 Spot From Stericycle
Mon, Jul 28, 12:14 PM ET, by ETF Channel

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

Proshares Short VIX Short-Term Futures ETF Experiences Big Inflow
Mon, Jul 28, 11:34 AM ET, by ETF Channel

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

PFF, HSBC, DB, WY: ETF Inflow Alert
Mon, Jul 28, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: PFF, HSBC, DB, WY Exchange traded funds (ETFs) trade just ...

IYW, MU, ADSK, ORCL: ETF Outflow Alert
Mon, Jul 28, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: IYW, MU, ADSK, ORCL Exchange traded funds (ETFs) trade just ...

XPH, AKRX, PRGO, QCOR: ETF Outflow Alert
Mon, Jul 28, 11:34 AM ET, by ETF Channel

Symbols mentioned in this story: XPH, AKRX, PRGO, QCOR Exchange traded funds (ETFs) trade just ...

VYM, MCD, OXY, LLY: Large Inflows Detected at ETF
Mon, Jul 28, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: VYM, MCD, OXY, LLY Exchange traded funds (ETFs) trade just ...

VTV, HON, GS, HPQ: ETF Inflow Alert
Mon, Jul 28, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: VTV, HON, GS, HPQ Exchange traded funds (ETFs) trade just ...

VBK, HAR, ALKS, COO: Large Outflows Detected at ETF
Mon, Jul 28, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: VBK, HAR, ALKS, COO Exchange traded funds (ETFs) trade just ...

SSO, MMM, ABT, ACN: Large Inflows Detected at ETF
Mon, Jul 28, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: SSO, MMM, ABT, ACN Exchange traded funds (ETFs) trade just ...

XLP, CVS, PEP, WAG: ETF Inflow Alert
Mon, Jul 28, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: XLP, CVS, PEP, WAG Exchange traded funds (ETFs) trade just ...

Guggenheim Spin-Off (CSD) Shares Cross Below 200 DMA
Mon, Jul 28, 11:14 AM ET, by ETF Channel

In trading on Monday, shares of the Guggenheim Spin-Off ETF (CSD) crossed below their 200 ...

Shares of FGM Now Oversold
Mon, Jul 28, 11:14 AM ET, by ETF Channel

In trading on Monday, shares of the First Trust Germany AlphaDEX Fund ETF (FGM) entered ...

Russia Small-Cap Getting Very Oversold
Mon, Jul 28, 11:14 AM ET, by ETF Channel

In trading on Monday, shares of the Russia Small-Cap ETF (RSXJ) entered into oversold territory, ...

VGK Makes Notable Cross Below Critical Moving Average
Mon, Jul 28, 11:14 AM ET, by ETF Channel

In trading on Monday, shares of the Vanguard FTSE Europe ETF (VGK) crossed below their ...

IWN Makes Notable Cross Below Critical Moving Average
Mon, Jul 28, 11:14 AM ET, by ETF Channel

In trading on Monday, shares of the iShares Russell 2000 Value ETF (IWN) crossed below ...

FYT Crosses Below Key Moving Average Level
Mon, Jul 28, 11:14 AM ET, by ETF Channel

In trading on Monday, shares of the First Trust Small Cap Value AlphaDEX Fund ETF ...

Merck a Top Socially Responsible Dividend Stock With 3.0% Yield (MRK)
Mon, Jul 28, 9:24 AM ET, by ETF Channel

Merck & Co., Inc (MRK) has been named a Top Socially Responsible Dividend Stock by ...

Why PepsiCo is a Top 25 SAFE Dividend Stock (PEP)
Mon, Jul 28, 9:24 AM ET, by ETF Channel

PepsiCo Inc. (PEP) has been named to the Dividend Channel ''S.A.F.E. ...

PSCH: Large Inflows Detected at ETF
Fri, Jul 25, 11:14 AM ET, by ETF Channel

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

FBT, ITMN, PCYC, ALXN: Large Outflows Detected at ETF
Fri, Jul 25, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: FBT, ITMN, PCYC, ALXN Exchange traded funds (ETFs) trade just ...

XLF, AXP, USB, COF: Large Outflows Detected at ETF
Fri, Jul 25, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: XLF, AXP, USB, COF Exchange traded funds (ETFs) trade just ...

First Trust S&P REIT Index Fund Experiences Big Outflow
Fri, Jul 25, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: FRI, HCN, VTR, VNO Exchange traded funds (ETFs) trade just ...

11.0% of VDC Holdings Seeing Recent Insider Buys
Fri, Jul 25, 10:14 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Vanguard Consumer Staples ETF (VDC) shows ...

13.5% of VNQ Holdings Seeing Recent Insider Buys
Fri, Jul 25, 10:14 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Vanguard REIT ETF (VNQ) shows an ...

ETN Named A Top Socially Responsible Dividend Stock
Fri, Jul 25, 9:34 AM ET, by ETF Channel

Eaton Corp plc (ETN) has been named a Top Socially Responsible Dividend Stock by Dividend ...

U.S. Bancorp a Top 25 Dividend Giant With 2.30% Yield (USB)
Fri, Jul 25, 9:34 AM ET, by ETF Channel

U.S. Bancorp (USB) has been named as a Top 25 ''Dividend Giant'' by ETF Channel, ...

PBCT Named Top 25 SAFE Dividend Stock Increasing Payments For Decades
Fri, Jul 25, 9:34 AM ET, by ETF Channel

People's United Financial, Inc. (PBCT) has been named to the Dividend Channel ''S.A.F.E. ...

SPDR S&P Mortgage Finance Breaks Below 200-Day Moving Average - Notable for KME
Thu, Jul 24, 4:14 PM ET, by ETF Channel

In trading on Thursday, shares of the SPDR S&P Mortgage Finance ETF (KME) crossed below ...

SLV Makes Notable Cross Below Critical Moving Average
Thu, Jul 24, 4:14 PM ET, by ETF Channel

In trading on Thursday, shares of the iShares Silver Trust ETF (SLV) crossed below their ...

Simon Property Group Moves Up In Analyst Rankings, Passing Precision Castparts
Thu, Jul 24, 12:14 PM ET, by ETF Channel

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

DGL Crosses Below Key Moving Average Level
Thu, Jul 24, 11:14 AM ET, by ETF Channel

In trading on Thursday, shares of the PowerShares DB Gold Fund ETF (DGL) crossed below ...

Uranium (URA) Shares Cross Below 200 DMA
Thu, Jul 24, 11:14 AM ET, by ETF Channel

In trading on Thursday, shares of the Uranium ETF (URA) crossed below their 200 day ...

IYM, DOW, IP, MON: Large Inflows Detected at ETF
Thu, Jul 24, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IYM, DOW, IP, MON Exchange traded funds (ETFs) trade just ...

QQQ, INTC, GOOGL, FB: Large Outflows Detected at ETF
Thu, Jul 24, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: QQQ, INTC, GOOGL, FB Exchange traded funds (ETFs) trade just ...

Strong Insider Buying Reported in TZE Holdings
Thu, Jul 24, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the iShares Target Date 2015 ETF (TZE) ...

14.3% of VIS Holdings Seeing Recent Insider Buys
Thu, Jul 24, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Vanguard Industrials ETF (VIS) shows an ...

HCP a Top 25 Dividend Giant With $3.03B Held By ETFs
Thu, Jul 24, 8:14 AM ET, by ETF Channel

HCP, Inc. (HCP) has been named as a Top 25 ''Dividend Giant'' by ETF Channel, ...

Why Cisco Systems is a Top Socially Responsible Dividend Stock (CSCO)
Thu, Jul 24, 8:14 AM ET, by ETF Channel

Cisco Systems, Inc. (CSCO) has been named a Top Socially Responsible Dividend Stock by Dividend ...

Shares of TECS Now Oversold
Wed, Jul 23, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the Daily Technology Bear 3x Shares ETF (TECS) entered ...

Edison International Takes Over #18 Spot From Delta Air Lines
Wed, Jul 23, 12:14 PM ET, by ETF Channel

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

PowerShares DWA Developed Markets Momentum Portfolio (PIZ) Shares Cross Above 200 DMA
Wed, Jul 23, 11:24 AM ET, by ETF Channel

In trading on Wednesday, shares of the PowerShares DWA Developed Markets Momentum Portfolio ETF (PIZ) ...

IWD, C, AIG, F: Large Outflows Detected at ETF
Wed, Jul 23, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: IWD, C, AIG, F Exchange traded funds (ETFs) trade just ...

IEMG, BAP, MBT, SCCO: Large Inflows Detected at ETF
Wed, Jul 23, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: IEMG, BAP, MBT, SCCO Exchange traded funds (ETFs) trade just ...

BSCF, BAC, AZN, D: ETF Inflow Alert
Wed, Jul 23, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: BSCF, BAC, AZN, D Exchange traded funds (ETFs) trade just ...

HDV, CVX, PM, KO: ETF Inflow Alert
Wed, Jul 23, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: HDV, CVX, PM, KO Exchange traded funds (ETFs) trade just ...

CDI a Top 25 Dividend Giant With 3.55% Yield (CDI)
Wed, Jul 23, 9:24 AM ET, by ETF Channel

CDI Corp. (CDI) has been named as a Top 25 ''Dividend Giant'' by ETF Channel, ...

Why NextEra Energy is a Top Socially Responsible Dividend Stock (NEE)
Wed, Jul 23, 9:24 AM ET, by ETF Channel

NextEra Energy Inc (NEE) has been named a Top Socially Responsible Dividend Stock by Dividend ...

Danaher Moves Up In Analyst Rankings, Passing Anadarko Petroleum
Tue, Jul 22, 1:14 PM ET, by ETF Channel

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

Related videos | all videos »
  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 - 2014, 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 over 1000 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.