Market Overview

IBM Vs. MTK: An Absurd Comparison (MTK, IBM, LNKD)


Have you ever heard of the SPDR Morgan Stanley Technology ETF (NYSE: MTK)? The Professor is willing to bet the answer is "No" and that's not a bad thing. Sometimes it feels like MTK doesn't get much attention good or bad.

In other words, comparing the returns of this thinly traded, hardly noticed fund to International Business Machines (NYSE: IBM) is basically absurd and it goes back to the molestation of the the ETF vs. stocks argument.

IBM accounts for all of 2.57% of MTK's weight, so yeah, if the stock is performing well, it's likely to outperform the ETF. IBM is MTK's Number 28 holding...out of 33.

In other words, it's more relevant to compare MTK to its more significant holdings. In the past five years, MTK is up about 20% while Applied Materials (Nasdaq: AMAT), the ETF's seventh-largest holding, is down about 30%.

Seagate Technology (NYSE: STX), currently the ETF's largest holding, has also lagged the fund over the past five years. Since LinkedIn (NYSE: LNKD), now MTK's second-largest holding, came public, the ETF has slightly outperformed that stock.

Noteworthy is the fact that MTK has torched the SPDR Dow Jones Industrial Average (NYSE: DIA) year-to-date. Guess what the largest holding in DIA is? IBM.

Posted-In: Long Ideas News Sector ETFs Broad U.S. Equity ETFs Short Ideas Movers Tech Trading Ideas


Related Articles (DIA + AMAT)

View Comments and Join the Discussion!