TECH - Here's What You Need to Know About Tech ETF XLK's Shake-Up | Benzinga
The Technology Select Sector SPDR Fund (ARCA:XLK), the second-largest ETF in the sector, is poised for a big rebalance this week. This shake-up will increase the exposure to NVIDIA Corp. (NASDAQ: NVDA) at the expense of Apple Inc. (NASDAQ: AAPL).
A Major Shift
The change comes as NVIDIA has been on a relentless rally, driven by its prominence in the artificial intelligence space. The stock has surged 164% so far this year and surpassed Apple in market value earlier this month. If NVIDIA maintains its position as the world's second-largest company by the end of this week, then XLK will increase its allocation in NVIDIA stock to more than 20% and drop its allocation of Apple to just 4.5%. The shift will create a $10 billion trade to buy NVIDIA stock and about an $11 billion trade to sell Apple stock, according to Bloomberg.
Currently, the XLK ETF is heavily weighted toward its top holdings, which include Microsoft, Apple and NVIDIA. As of Jun 11, 2024, Microsoft had 22.4% ...