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

Shares of EMCG Now Oversold
Thu, May 28, 3:54 PM ET, by ETF Channel

In trading on Thursday, shares of the WisdomTree Emerging Markets Consumer Growth Fund ETF (EMCG) ...

EPHE Crowded With Sellers
Thu, May 28, 11:24 AM ET, by ETF Channel

In trading on Thursday, shares of the iShares MSCI Philippines ETF (EPHE) entered into oversold ...

IWF, GILD, V, CMCSA: Large Inflows Detected at ETF
Thu, May 28, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: IWF, GILD, V, CMCSA Exchange traded funds (ETFs) trade just ...

KRE, OZRK, GBCI, CATY: Large Inflows Detected at ETF
Thu, May 28, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: KRE, OZRK, GBCI, CATY Exchange traded funds (ETFs) trade just ...

USMV, ABC, PAYX, MCD: Large Inflows Detected at ETF
Thu, May 28, 11:24 AM ET, by ETF Channel

Symbols mentioned in this story: USMV, ABC, PAYX, MCD Exchange traded funds (ETFs) trade just ...

OEF, ABBV, BA, BIIB: ETF Outflow Alert
Thu, May 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: OEF, ABBV, BA, BIIB Exchange traded funds (ETFs) trade just ...

TAN, SUNE, SCTY, FSLR: Large Outflows Detected at ETF
Thu, May 28, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: TAN, SUNE, SCTY, FSLR Exchange traded funds (ETFs) trade just ...

Questar a Top Ranked SAFE Dividend Stock With 3.7% Yield (STR)
Thu, May 28, 8:34 AM ET, by ETF Channel

Questar Corp. (STR) has been named to the Dividend Channel ''S.A.F.E. ...

IYZ Makes Bullish Cross Above Critical Moving Average
Wed, May 27, 4:14 PM ET, by ETF Channel

In trading on Wednesday, shares of the iShares U.S. Telecommunications ETF (IYZ) crossed above their ...

EWG: Large Inflows Detected at ETF
Wed, May 27, 11:14 AM ET, by ETF Channel

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

SCZ: ETF Inflow Alert
Wed, May 27, 11:14 AM ET, by ETF Channel

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

EDC Crosses Below Key Moving Average Level
Wed, May 27, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the Daily Emerging Markets Bull 3x Shares ETF (EDC) ...

Brazil Consumer (BRAQ) Enters Oversold Territory
Wed, May 27, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the Brazil Consumer ETF (BRAQ) entered into oversold territory, ...

RSX Makes Notable Cross Below Critical Moving Average
Wed, May 27, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the Russia ETF (RSX) crossed below their 200 day ...

EVX Makes Notable Cross Below Critical Moving Average
Wed, May 27, 11:14 AM ET, by ETF Channel

In trading on Wednesday, shares of the Environmental Services ETF (EVX) crossed below their 200 ...

VOO: ETF Inflow Alert
Wed, May 27, 11:14 AM ET, by ETF Channel

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

CWI, TSM, RY.CA, TD.CA: ETF Inflow Alert
Wed, May 27, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: CWI, TSM, RY.CA, TD.CA Exchange traded funds (ETFs) trade just ...

iShares MSCI Mexico Capped ETF Experiences Big Outflow
Wed, May 27, 10:54 AM ET, by ETF Channel

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

11.8% of XLG Holdings Seeing Recent Insider Buys
Wed, May 27, 9:54 AM ET, by ETF Channel

A look at the weighted underlying holdings of the Guggenheim Russell Top 50 Mega Cap ...

EGShares S&P Emerging Markets Core Breaks Below 200-Day Moving Average - Notable for EMCR
Tue, May 26, 4:14 PM ET, by ETF Channel

In trading on Tuesday, shares of the EGShares S&P Emerging Markets Core ETF (EMCR) crossed ...

SMIN Crosses Below Key Moving Average Level
Tue, May 26, 4:14 PM ET, by ETF Channel

In trading on Tuesday, shares of the iShares MSCI India Small-Cap ETF (SMIN) crossed below ...

SPDR Russell 1000 Low Volatility Breaks Below 200-Day Moving Average - Notable for LGLV
Tue, May 26, 4:14 PM ET, by ETF Channel

In trading on Tuesday, shares of the SPDR Russell 1000 Low Volatility ETF (LGLV) crossed ...

iShares Emerging Markets Dividend Breaks Below 200-Day Moving Average - Notable for DVYE
Tue, May 26, 4:14 PM ET, by ETF Channel

In trading on Tuesday, shares of the iShares Emerging Markets Dividend ETF (DVYE) crossed below ...

RBL Makes Notable Cross Below Critical Moving Average
Tue, May 26, 3:54 PM ET, by ETF Channel

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

iShares 10-20 Year Treasury Bond (TLH) Shares Cross Above 200 DMA
Tue, May 26, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the iShares 10-20 Year Treasury Bond ETF (TLH) crossed ...

SCO Makes Bullish Cross Above Critical Moving Average
Tue, May 26, 3:54 PM ET, by ETF Channel

In trading on Tuesday, shares of the ProShares UltraShort Bloomberg Crude Oil ETF (SCO) crossed ...

Becton, Dickinson Achieves #89 Analyst Rank, Surpassing Ryder System
Tue, May 26, 11:54 AM ET, by ETF Channel

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

ISTB Makes Notable Cross Below Critical Moving Average
Tue, May 26, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the iShares Core 1-5 Year USD Bond ETF (ISTB) ...

Natural Resources (HAP) Shares Cross Below 200 DMA
Tue, May 26, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the Natural Resources ETF (HAP) crossed below their 200 ...

First Trust Dow Jones Global Select Dividend Index Fund Breaks Below 200-Day Moving Average - Notable for FGD
Tue, May 26, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the First Trust Dow Jones Global Select Dividend Index ...

GLL Crosses Above Key Moving Average Level
Tue, May 26, 11:14 AM ET, by ETF Channel

In trading on Tuesday, shares of the ProShares UltraShort Gold ETF (GLL) crossed above their ...

Health Care Select Sector SPDR Fund Experiences Big Inflow
Tue, May 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: XLV, PFE, UNH, BMY Exchange traded funds (ETFs) trade just ...

VUG, ORCL, AMGN, ACT: ETF Inflow Alert
Tue, May 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VUG, ORCL, AMGN, ACT Exchange traded funds (ETFs) trade just ...

MDY, AAP, CHD, SIG: ETF Outflow Alert
Tue, May 26, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: MDY, AAP, CHD, SIG Exchange traded funds (ETFs) trade just ...

DIA, GS, IBM, MMM: ETF Outflow Alert
Tue, May 26, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: DIA, GS, IBM, MMM Exchange traded funds (ETFs) trade just ...

IDV: Large Outflows Detected at ETF
Tue, May 26, 10:54 AM ET, by ETF Channel

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

FDL Crosses Below Key Moving Average Level
Tue, May 26, 10:54 AM ET, by ETF Channel

In trading on Tuesday, shares of the First Trust Morningstar Dividend Leaders Index Fund ETF ...

DOO Makes Notable Cross Below Critical Moving Average
Tue, May 26, 10:54 AM ET, by ETF Channel

In trading on Tuesday, shares of the WisdomTree International Dividend ex-Financials Fund ETF (DOO) crossed ...

XLY, DIS, AMZN, HD: Large Outflows Detected at ETF
Tue, May 26, 10:54 AM ET, by ETF Channel

Symbols mentioned in this story: XLY, DIS, AMZN, HD Exchange traded funds (ETFs) trade just ...

SPDR S&P Transportation Breaks Below 200-Day Moving Average - Notable for XTN
Fri, May 22, 4:14 PM ET, by ETF Channel

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

BSV Crosses Below Key Moving Average Level
Fri, May 22, 4:14 PM ET, by ETF Channel

In trading on Friday, shares of the Vanguard Short-Term Bond ETF (BSV) crossed below their ...

SCPB Makes Notable Cross Below Critical Moving Average
Fri, May 22, 4:14 PM ET, by ETF Channel

In trading on Friday, shares of the SPDR Barclays Short Term Corporate Bond ETF (SCPB) ...

Tyson Foods Moves Up In Analyst Rankings, Passing American Tower
Fri, May 22, 11:54 AM ET, by ETF Channel

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

GURU, ALLY, AMX, BIDU: Large Outflows Detected at ETF
Fri, May 22, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: GURU, ALLY, AMX, BIDU Exchange traded funds (ETFs) trade just ...

VIG, UTX, ABT, TXN: ETF Outflow Alert
Fri, May 22, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: VIG, UTX, ABT, TXN Exchange traded funds (ETFs) trade just ...

IYZ, LVLT, CTL, SBAC: Large Outflows Detected at ETF
Fri, May 22, 11:14 AM ET, by ETF Channel

Symbols mentioned in this story: IYZ, LVLT, CTL, SBAC Exchange traded funds (ETFs) trade just ...

11.5% of TWOK Holdings Seeing Recent Insider Buys
Fri, May 22, 9:44 AM ET, by ETF Channel

A look at the weighted underlying holdings of the SPDR Russell 2000 ETF (TWOK) shows ...

FRI Crosses Below Key Moving Average Level
Thu, May 21, 4:14 PM ET, by ETF Channel

In trading on Thursday, shares of the First Trust S&P REIT Index Fund ETF (FRI) ...

RRF Crosses Above Key Moving Average Level
Thu, May 21, 4:14 PM ET, by ETF Channel

In trading on Thursday, shares of the WisdomTree Global Real Return Fund ETF (RRF) crossed ...

Vanguard REIT (VNQ) Shares Cross Below 200 DMA
Thu, May 21, 4:14 PM ET, by ETF Channel

In trading on Thursday, shares of the Vanguard REIT ETF (VNQ) crossed below their 200 ...

  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 - 2015, 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.