4 ETFs For Apple's Developers Conference (IYW, QQQ, REW)
Apple (Nasdaq: AAPL) kicks off another eagerly anticipated Worldwide Developers Conference today at the Moscone conference center in San Francisco. It will be a bittersweet occasion for the tech juggernaut because this is the first WWDC since the passing of co-founder and CEO Steve Jobs, the legendary Silicon Valley visionary.
It can be said that expectations run too high and that too much emphasis is placed on these confabs regarding the near-term implications for the stock, but one thing is for certain: Apple is already the most spotlighted stock out there and WWDC just gives traders and investors one more good reason to listen to what CEO Tim Cook has to say.
While analysts don't expect a new the company to show off a new iPhone this year, Cook probably will highlight new iPhone software and at least talk about new Mac software while showing off new Macs. In other words, there should be enough ammo out of WWDC to put Apple shares play in this week. Those that are priced out of Apple's stock because of the lofty price tag or those opting for a more diverse approach have plenty of ETFs to choose from and the following could move on WWDC news.
ProShares UltraShort Technology (NYSE: REW) This is very much a short-term trading idea and a bearish one at that. Assume for a moment that Apple doesn't thrill its loyal followers with another epic new product or upgrade at WWDC. That could provoke a knee-jerk sell-off in the stock, immediately lifting thinly traded REW in the process. So why REW over the far more liquid ProShares UltraPro Short QQQ (Nasdaq: SQQQ)? Because REW is the double-leveraged inverse equivalent of the of the Dow Jones U.S. Technology Index, which is tracked by this ETF...
iShares Dow Jones U.S. Technology Sector Index Fund (NYSE: IYW) With an allocation of almost 23%, the iShares Dow Jones U.S. Technology Sector Index Fund is still the ETF with largest weight to the iPhone and iPad maker. That makes this ETF a must-watch for WWDC and IYW's Apple exposure justifies the choice of REW as a potential bearish play.
IYW is the ETF poster boy for the benefits and disadvantages of an ETF being excessively weighted to just one stock. At least IYW makes things easy. It's a buy when a Apple is rising and a sell when the stock is faltering.
PowerShares QQQ (Nasdaq: QQQ) As the Nasdaq 100 tracking fund and as an ETF with almost 19% allocation to Apple, the PowerShares QQQ cannot be ignored when it comes to ETF proxies on Apple. And as the premier Nasdaq 100 tracking ETF, QQQ also offers decent exposure to Apple suppliers that also have the potential to move on WWDC-related news. QQQ has found support at $62 and following last week's 4% gain for the Nasdaq, the ETF looks poised to run higher. Hedge long positions in QQQ with SQQQ.
Global X NASDAQ 500 ETF (Nasdaq: QQQV) Ah, the power of the rising market cap. In February, just as Apple was starting to increase its lead over Exxon Mobil (NYSE: XOM) for the title of largest U.S. company by market value, had a 13% weight to Apple. Today, the ETF's Apple exposure has risen to nearly 15%. QQQV is easily one of the most unheralded ETFs with a double-digit weight to Apple, though the fund is worth paying attention to. It' s up 11% year to date.
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