Big Earnings Week for Tech ETFs

ETF Trends

Investors will be watching technology exchange traded funds as four tech giants report earnings this week, with Apple (AAPL) set to reveal fourth-quarter results after Monday’s close.

Apple shares were up Monday ahead of the earnings report, trading around its $550 price target.

“The risks seem balanced, to the upside and downside, with good news priced in,” Colin Gillis, a tech analyst at BGC Financial, said in a Wall Street Journal article.

Facebook (FB) will issue a statement after the market close Wednesday, January 29.

Google (GOOG) and Amazon (AMZN) are set to reveal earnings after the bell Thursday, January 30

The Technology Select Sector SPDR Fund (XLK) and the iShares U.S. Technology ETF (IYW) both have significant weights toward the tech giants, namely Apple and Google, which make up over a quarter of each ETFs’ portfolios, but excludes Amazon, which is also considered a consumer discretionary name. XLK has 14.4% in AAPL and 9.3% in GOOG while IYW holds AAPL at 16.9% and GOOG at 10.9%. The two also include a smaller, but still significant, weight in Facebook, with XLK allocating 2.6% in FB and IYW holding 3.1%.

IYW has gained 23.6% over the past year and XLK is up 22.3%. In comparison, the broader S&P 500 Index rose 22.3% over the past year.

Amazon, though, has a heavier weight in Internet-centric ETFs, such as PowerShares NASDAQ Internet Portfolio (PNQI) and First Trust Dow Jones Internet Index Fund (FDN) . PNQI includes FB 8.9%, GOOG 8.2% and AMZN 7.6%. FDN holds GOOG 9.8%, AMZN 7.3% and FB 6.5%. [Another View on Internet ETFs]

PNQI is up 49.% over the past year while FDN increased 42.3%.

Technology Select Sector SPDR Fund

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XLK_ETF

For more information on the tech sector, visit our technology category.

For full disclosure, Tom Lydon’s clients own shares of FB, GOOG, AAPL and AMZN.

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