Apple Inc. (NASDAQ:AAPL) has been struggling to hit $450 per share, and one MarketWatch columnist says 99 percent of investors don’t need to buy the stock—because they already own it.
Apple And ETFs
Jeff Reeves writes that because market cap weighs heavily on many exchange-traded funds (ETFs), most investors already have a position in Apple Inc. (NASDAQ:AAPL), which has a market cap of almost $400 billion. He says even in funds that are well diversified, many investors will still be slightly overweight when it comes to Apple Inc. (NASDAQ:AAPL). And when it comes to ETFs which are focused on the technology sector, up to 15 percent of their portfolio could be allocated to shares of Apple Inc. (NASDAQ:AAPL).
He notes that it is very important that 99 percent of investors focus on funds before individual investments, particularly because index investing has been performing much better than individual stock picking. Then he takes a closer look at just how much the largest ETFs have invested in Apple Inc. (NASDAQ:AAPL).
ETFs By The Numbers
The SPDR S&P 500 ETF Trust (NYSEARCA: SPY), which is the largest ETF, has 1 percent of its weight in Apple, although there are 499 other companies included in the index. According to Reeves, that’s overweight technically. He also looked at iShares S&P 500 Index (ETF) (NYSEARCA:IVV). About 2.66 percent of the fund is focused on Apple. Smaller ETFs have even more of their weight pushed toward Apple. For example, the Technology SPDR (ETF) (NYSE:XLK) has about 12.8 percent of its weight in Apple Inc. (NASDAQ:AAPL), while the iShares Dow Jones US Technology (ETF) (NYSEARCA:IYW) has about 15.6 percent of its weight in Apple.
Apple Changing Positions
The whole point is that it might be worth having some money in Apple Inc. (NASDAQ:AAPL), especially or perhaps only when doing it through an ETF or mutual fund. The problem is that Apple has been dragging down some of the biggest hedge funds because its stock hasn’t done what it’s “supposed” to do. But by investing in ETFs or other diversified funds like hedge funds, investors are able to reap the benefits if Apple Inc. (NASDAQ:AAPL) does rise while mitigating the losses if it doesn’t.