Apple’s Nasdaq Influence Set To Drop (AAPL, QCOM, GOOG, MSFT, ORCL, QQQ)
Apple’s (AAPL) influence on the Nasdaq-100 Index is set to decline following an announcement by the exchange that the index will be re-weighted and Apple’s weight in the index will be slashed to 12.3% from 20.5%. The rebalancing will take effect on May 2.
The news isn’t weighing on shares of Apple too much today as the stock is up fractionally and the Personal Computer and Smartphone Stocks Index is up 0.4%, but Apple shares could see some selling pressure as the rebalancing date draws closer as fund managers are forced to alter their holdings to give investors a more accurate picture of what the Nasdaq-100 will look like following the change in Apple’s weight.
In addition to Apple, 81 other Nasdaq-100 members will see their weights in the index pared, including Qualcomm (QCOM). Eighteen stocks including Google (GOOG), Microsoft (MSFT) and Oracle (ORCL) will see their respective weights increased.
Based on its shares outstanding, Apple accounts for too large a percentage of the Nasdaq-100, according to the Wall Street Journal. The company has a market cap that is roughly twice that of Google, but has five times Google’s weight in the Nasdaq-100, the Journal notes.
PowerShares QQQ (QQQ), the ETF proxy for the Nasdaq-100, will likely be rebalanced as well to reflect the changes to the index. The ETF has $24.4 billion in assets and trades an average of 66.1 million shares per day, making it one of the most heavily traded issues on U.S. exchanges.
Investors can track the Personal Computer and Smartphone Stocks Index for performance trends and a suite of other metrics at tickerspy.com.
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