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Apple Close to Reclaiming $3T Market Cap: Top ETFs to Bet
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Apple Inc. (AAPL - Free Report) has been soaring this year, taking the tech giant back to the brink of a historic threshold of $3 trillion market valuation reached in January 2022. The stock has risen 35% so far this year, adding nearly $690 billion in market value. If the stock climbs another 10%, it will become the first company to ever be valued at $3 trillion (read: Take a Bite of Apple With These ETFs Post Solid Q2 Earnings).
To tap Apple’s huge success, investors could consider the ETFs with the largest allocation to the tech titan. Funds such as Technology Select Sector SPDR Fund (XLK - Free Report) , Vanguard Information Technology ETF (VGT - Free Report) , MSCI Information Technology Index ETF (FTEC - Free Report) and iShares US Technology ETF (IYW - Free Report) have Apple as the top or second firm with a double-digit allocation and carry a Zacks Rank #2 (Buy).
The massive gains came amid the big tech rally fueled by hype surrounding artificial intelligence (AI), easing inflation, upbeat corporate earnings, and safety play. In fact, U.S. tech stocks are enjoying their greatest outperformance, relative to the S&P 500, in 97 years, based on data from BofA Global Investment Strategy.
The rise is further supported by the bets that the Fed is nearing the end of its interest rate hiking cycle. As the tech sector relies on borrowing for superior growth, it is cheaper to borrow more money for further initiatives when interest rates are low.
In particular, investors have flocked to the iPhone maker’s steady revenue and massive cash flows. This is especially true as the tech titan reported solid second-quarter fiscal 2023 results by beating estimates on both earnings and revenues, powered by a surprise boost in iPhone sales.
Per the latest 13F filing, the legendary investor Warren Buffett continued to love Apple and said it is a better business than any other in Berkshire Hathaway Inc.'s portfolio. He revealed a $1-billion stake in Apple in May 2016 and by March 2023, boosted it to $151 billion. Now, Apple makes up about 45% of Buffett’s portfolio. "It's an incredibly valuable utility," Buffett said about the iPhone maker in a recent interview with CNBC (read: Insights Into 13F Filings: ETFs to Bet Like Billionaires).
The latest multibillion-dollar deal with Broadcom (AVGO - Free Report) to make 5G radio frequency components and wireless chips would add more strength to the Apple stock. Currently, Apple carries a Zacks Rank #3 (Hold) and a Growth Score of B, suggesting that the iPhone maker is primed for growth. The stock falls under the top Zacks Industry Rank (in the top 27%).
Technology Select Sector SPDR Fund targets the broad technology sector and follows the Technology Select Sector Index. It holds about 64 securities in its basket, with Apple making up for a 23.3% share. Technology Select Sector SPDR Fund has key holdings in software, technology hardware, storage & peripherals, and semiconductors & semiconductor equipment.
Technology Select Sector SPDR Fund is the most popular and heavily traded ETF, with AUM of $44 billion and an average daily volume of 6 million shares. The fund charges 10 bps in fees per year.
Vanguard Information Technology ETF manages about $49 billion in its asset base and provides exposure to 364 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Here, Apple accounts for a 23.5% share. Technology hardware storage & peripheral, systems software, semiconductors and application software are the top four sectors.
Vanguard Information Technology ETF has an expense ratio of 0.10%, while volume is solid at nearly 476,000 shares.
MSCI Information Technology Index ETF is home to 361 technology stocks, with AUM of $6.4 billion. It follows the MSCI USA IMI Information Technology Index. Apple accounts for a 23.4% allocation.
MSCI Information Technology Index ETF has an expense ratio of 0.08%, while volume is solid at 194,000 shares a day (read: Tech ETFs Roaring to New 52-Week Highs).
iShares Dow Jones US Technology ETF tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, giving investors exposure to 139 U.S. electronics, computer software and hardware, and informational technology companies. Apple makes up 19.1% of the assets.
iShares Dow Jones US Technology ETF has AUM of $11.4 billion and charges 39 bps in fees and expenses. Volume is good as it exchanges 486,000 shares a day.
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Apple Close to Reclaiming $3T Market Cap: Top ETFs to Bet
Apple Inc. (AAPL - Free Report) has been soaring this year, taking the tech giant back to the brink of a historic threshold of $3 trillion market valuation reached in January 2022. The stock has risen 35% so far this year, adding nearly $690 billion in market value. If the stock climbs another 10%, it will become the first company to ever be valued at $3 trillion (read: Take a Bite of Apple With These ETFs Post Solid Q2 Earnings).
To tap Apple’s huge success, investors could consider the ETFs with the largest allocation to the tech titan. Funds such as Technology Select Sector SPDR Fund (XLK - Free Report) , Vanguard Information Technology ETF (VGT - Free Report) , MSCI Information Technology Index ETF (FTEC - Free Report) and iShares US Technology ETF (IYW - Free Report) have Apple as the top or second firm with a double-digit allocation and carry a Zacks Rank #2 (Buy).
The massive gains came amid the big tech rally fueled by hype surrounding artificial intelligence (AI), easing inflation, upbeat corporate earnings, and safety play. In fact, U.S. tech stocks are enjoying their greatest outperformance, relative to the S&P 500, in 97 years, based on data from BofA Global Investment Strategy.
The rise is further supported by the bets that the Fed is nearing the end of its interest rate hiking cycle. As the tech sector relies on borrowing for superior growth, it is cheaper to borrow more money for further initiatives when interest rates are low.
In particular, investors have flocked to the iPhone maker’s steady revenue and massive cash flows. This is especially true as the tech titan reported solid second-quarter fiscal 2023 results by beating estimates on both earnings and revenues, powered by a surprise boost in iPhone sales.
Per the latest 13F filing, the legendary investor Warren Buffett continued to love Apple and said it is a better business than any other in Berkshire Hathaway Inc.'s portfolio. He revealed a $1-billion stake in Apple in May 2016 and by March 2023, boosted it to $151 billion. Now, Apple makes up about 45% of Buffett’s portfolio. "It's an incredibly valuable utility," Buffett said about the iPhone maker in a recent interview with CNBC (read: Insights Into 13F Filings: ETFs to Bet Like Billionaires).
The latest multibillion-dollar deal with Broadcom (AVGO - Free Report) to make 5G radio frequency components and wireless chips would add more strength to the Apple stock. Currently, Apple carries a Zacks Rank #3 (Hold) and a Growth Score of B, suggesting that the iPhone maker is primed for growth. The stock falls under the top Zacks Industry Rank (in the top 27%).
Apple stock is cheap, trading at a P/E ratio of 29.08 compared with other few tech names — Amazon’s (AMZN - Free Report) 73.46 times, Netflix’s (NFLX - Free Report) 32.44 times and Microsoft’s (MSFT - Free Report) 33.27 times (see: all the Technology ETFs here).
ETFs to Buy
Technology Select Sector SPDR Fund (XLK - Free Report)
Technology Select Sector SPDR Fund targets the broad technology sector and follows the Technology Select Sector Index. It holds about 64 securities in its basket, with Apple making up for a 23.3% share. Technology Select Sector SPDR Fund has key holdings in software, technology hardware, storage & peripherals, and semiconductors & semiconductor equipment.
Technology Select Sector SPDR Fund is the most popular and heavily traded ETF, with AUM of $44 billion and an average daily volume of 6 million shares. The fund charges 10 bps in fees per year.
Vanguard Information Technology ETF (VGT - Free Report)
Vanguard Information Technology ETF manages about $49 billion in its asset base and provides exposure to 364 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Here, Apple accounts for a 23.5% share. Technology hardware storage & peripheral, systems software, semiconductors and application software are the top four sectors.
Vanguard Information Technology ETF has an expense ratio of 0.10%, while volume is solid at nearly 476,000 shares.
MSCI Information Technology Index ETF (FTEC - Free Report)
MSCI Information Technology Index ETF is home to 361 technology stocks, with AUM of $6.4 billion. It follows the MSCI USA IMI Information Technology Index. Apple accounts for a 23.4% allocation.
MSCI Information Technology Index ETF has an expense ratio of 0.08%, while volume is solid at 194,000 shares a day (read: Tech ETFs Roaring to New 52-Week Highs).
iShares US Technology ETF (IYW - Free Report)
iShares Dow Jones US Technology ETF tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, giving investors exposure to 139 U.S. electronics, computer software and hardware, and informational technology companies. Apple makes up 19.1% of the assets.
iShares Dow Jones US Technology ETF has AUM of $11.4 billion and charges 39 bps in fees and expenses. Volume is good as it exchanges 486,000 shares a day.