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Apple Notches Best Day Since April 2020: 4 ETFs to Taste

Sweta Killa
·4-min read

Apple Inc. AAPL climbed 7.5% at the close a day after it reported robust fourth-quarter fiscal 2022 results. This represents the best one-day performance since April 2020. The tech giant beat the estimates on both the top and bottom lines and posted record quarterly revenues.

Apple is the only big tech that came up with solid results last week amid a flood of weak earnings releases from its counterparts. As such, ETFs having the largest allocation to the tech titan enjoyed surged on the day. Technology Select Sector SPDR Fund XLK, Vanguard Information Technology ETF VGT, MSCI Information Technology Index ETF FTEC and iShares US Technology ETF IYW gained more than 4%. These funds have Apple as the top firm with a double-digit allocation and carry a Zacks Rank #2 (Buy).

Apple Earnings in Focus

Earnings per share came in at $1.29, outpacing the Zacks Consensus Estimate by 3 cents and increasing 4% from the year-ago earnings. Revenues increased 8% year over year to a record $90.1 billion and edged past the estimate of $88.5 billion.

iPhone sales grew 10% to a record $42.6 billion. Services revenues, comprising iTunes, Apple Music, iCloud, Apple Pay and Apple Care, soared 5% year over year to a record $19.2 billion. Revenues from Wearables, Home and Accessories, which include Apple Watch, AirPods, HomePod, Apple TV and Beats headphones, rose 10% to $9.7 billion. Mac sales jumped 25% to $11.5 billion, while iPad sales dropped 13% to $7.2 billion.

Last month, Apple unveiled the iPhone 14 series smartphones with four new models — iPhone 14, iPhone 14 Plus, iPhone 14 Pro and iPhone 14 Pro Max, as well as products like Apple Watch Series 8, Apple Watch Ultra and next-gen AirPods Pro (read: Apple ETFs in Focus Post iPhone 14 Launch).

ETFs to Buy

Technology Select Sector SPDR Fund (XLK)

Technology Select Sector SPDR Fund targets the broad technology sector and follows the Technology Select Sector Index. It holds about 75 securities in its basket, with Apple making up for a 24.1% share. Technology Select Sector SPDR Fund has key holdings in software, technology hardware, storage & peripherals, semiconductors & semiconductor equipment and IT services.

Technology Select Sector SPDR Fund is the most popular and heavily traded ETF, with AUM of $38 billion and an average daily volume of 7.8 million shares. The fund charges 10 bps in fees per year.

Vanguard Information Technology ETF (VGT)

Vanguard Information Technology ETF manages about $39.4 billion in its asset base and provides exposure to 371 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Here, Apple accounts for a 22.4% share (see: all the Technology ETFs here).

Vanguard Information Technology ETF has an expense ratio of 0.10%, while volume is solid at nearly 837,000 shares.

MSCI Information Technology Index ETF (FTEC)

MSCI Information Technology Index ETF is home to 385 technology stocks with AUM of $5 billion. It follows the MSCI USA IMI Information Technology Index. Apple accounts for a 22.3% allocation.

MSCI Information Technology Index ETF has an expense ratio of 0.08%, while volume is solid at 200,000 shares a day.

iShares US Technology ETF (IYW)

iShares Dow Jones US Technology ETF tracks the Russell 1000 Technology RIC 22.5/45 Capped Index, giving investors exposure to 143 U.S. electronics, computer software and hardware, and informational technology companies. Apple makes up for 20.3% of the assets (read: Least-Hurt Tech ETFs From Worst Stretch Since COVID Outbreak).

iShares Dow Jones US Technology ETF has AUM of $8 billion and charges 39 bps in fees and expenses. Volume is good as it exchanges nearly 1.1 million shares a day.


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Apple Inc. (AAPL) : Free Stock Analysis Report
 
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
 
Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports
 
iShares U.S. Technology ETF (IYW): ETF Research Reports
 
Vanguard Information Technology ETF (VGT): ETF Research Reports
 
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Zacks Investment Research