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Investors Should Take a Bite Out of Apple Amid Trade Wars

This article was originally published on ETFTrends.com.

While Treasury notes and precious metals are the default safe havens amid a raucous equities market, one stock analysts are loving is Apple. While the capital markets are getting roiled by volatility, Apple can help mute the impact of trade wars, according to some analysts.

What’s giving Apple this type of immunity or imperviousness to market pain?

“We believe Apple is more likely to absorb all the tariff impact and not raise prices on iPhone shipments and other hardware devices into the US, which we estimate will lead to a ~300 bps headwind to iPhone margins,” J.P. Morgan analysts said.

Furthermore, this represents an opportunity for investors to get in on Apple stock while it’s experiencing a pullback. In others words, there’s some value to be had there.

“In the broader context of the tailwinds that AAPL (Apple) has we view this as a relatively small amount over the next several quarters and would use the pullback as an especially attractive opportunity to buy shares of Apple,” the analyst said.

Other analysts from Bank of America issued a “buy” rating on the stock.

“We view the risk to earnings around $0.50-$0.75 per year, which is manageable in the broader context of a multi year tailwind...In the broader context of the tailwinds that AAPL has we view this as a relatively small amount over the next several quarters and would use the pullback as an especially attractive opportunity to buy shares of Apple,” said Bank of America.  

If investors are feeling just as optimistic as these analysts are, they could take a look at exchange-traded funds (ETFs) that have the heaviest weightings in the iPhone maker.

ETFs with heavy servings of Apple stock include:

  • Technology Select Sector SPDR ETF (XLK) : The Technology Select Sector SPDR Fund tries to reflect the performance of the Technology Select Sector Index, which is comprised of technology and telecom sector of the S&P 500. The ETF includes companies from technology hardware, storage, and peripherals; software; diversified telecommunication services; communications equipment; semiconductors and semiconductor equipment; internet software and services; IT services; electronic equipment, instruments and components; and wireless telecommunication services.
  • Fidelity MSCI Information Technology Index ETF (FTEC) : The First Trust Nasdaq-100 Tech Index tries to reflect the performance of the Nasdaq-100 Technology Sector Index, which consists of companies in the Nasdaq-100 Index classified as technology according to the Industry Classification Benchmark. QTEC currently holds 34 components and more-or-less equally weights its holdings.
  • iShares U.S. Technology ETF (IYW) : The iShares U.S. Technology ETF reflects the performance of the Dow Jones U.S. Information Technology Index, which includes all tech sector picks in the Dow Jones U.S. Index. Due to the Dow Jones’ classification of information tech names, healthcare technology stocks may be included while payment technology stocks are excluded.

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