Are You Ready To Double Up On Apple?

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Don’t look now, but Apple (AAPL) is up nearly 50% year to date. 

If you own the stock, congratulations might be in order, particularly if you bought at the beginning of the year or, better yet, way before that. Over the last five years, Apple has returned roughly 283%. 

Plus, Apple pays a dividend. Presently at $0.96 per share, Apple is riding a 12-year streak of annual dividend increases. No doubt the company is well on its way to becoming a dividend aristocrat. 

While it’s probably always a good idea to buy more shares of Apple (so you can reinvest those dividends!), you can get at the stock via quite a few ETFs. And, given Apple’s market cap, the company tends to appear at or near the top of the list of holdings in the big ETFs that own it. 

Along with getting specific on ETFs that own a lot of Apple, it makes sense to refer you back to a May installment of The Juice where we detailed How To Find And Assess An ETF’s Holdings. 

In that post, we show step-by-step how to see the stocks an ETF owns along with their weighting in the fund. It’s critical to find this information before purchasing an ETF so you’re well aware of what you own and your level of exposure. 

Because, as we said in reference to the popular SPDR S&P 500 ETF (SPY):

Because SPY is a passively-managed ETF that tracks the performance of the S&P 500 Index, the ETFs holdings are pretty much identical to the index’s composition. Still, it’s worth noting that, at the moment, Apple (AAPL) and Microsoft (MSFT) make up just over 14% of the SPY ETF. 

So you’re overweight AAPL and MSFT. Not a good or bad thing. Just a thing to consider as you make your investment decision. 

So, if you own SPY, realize you own a fund where, as of mid-June, Apple makes up roughly 7.5% of the portfolio. 

Along similar lines, Apple comprises approximately 12% of the tech heavy Invesco QQQ (QQQ), which tracks the Nasdaq-100 index. But it’s not just Apple you’ll be overweight. Here’s a look at QQQ’s top ten holdings, as of the other day:

• Microsoft Corp: 12.92%
• Apple: 12.31%
• Amazon.com: 6.82%
• NVIDIA Corp: 6.61%
• Meta Platforms: 4.09%
• Tesla: 3.98%
• Alphabet Class A: 3.97%
• Alphabet Class C: 3.92%
• Broadcom: 2.33%
• PepsiCo: 1.74%

The top ten holdings account for about 58% of the fund. 

Still want more Apple and other popular tech stocks? 

The Vanguard Information Technology ETF (VGT) has even more exposure to Apple, not to mention Microsoft. The two stocks combined comprise about 43% of the fund with Apple the top holding at roughly 23.5%. And this is a fund that owns 364 stocks, the same as the IT index it tracks. 

We could go on all day. Because, there’s a good chance that the ETFs that come across your desk own some or a lot of Apple, especially if they invest in tech or the broad market. 

That said, don’t just assume every fund that sounds like a tech ETF owns Apple. Some don’t. 

For example, the much-publicized ARK Innovation ETF (ARK), managed by Cathie Wood, does not own Apple. Tesla is the fund’s top holding. It owns Roku, Zoom, DraftKings and others. But no Apple. 

This is why you have to look up the holdings, read the list from top to bottom and make your investment decision from there. 

The Bottom Line: Owning Apple directly is great. You can collect dividend income and reinvest it into more shares of Apple stock. You can’t do this when you own Apple through an ETF. 

ETFs pay dividends. And you can reinvest the dividends they pay into new shares of the ETF, but not the individual stocks the ETF owns. This is something to keep in mind. 

That aside, if you’d like more Apple in your life and you want to round out your portfolio with exposure to other big – and not quite as big – stocks, going the ETF route might make sense for you, particularly if you’re a long-term investor with ample time on your side.  

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