Tech ETFs May See Action on Apple Year-End ‘Tax Swaps’

RELATED QUOTES

SymbolPriceChange
XLK36.01-0.31
AAPL527.68-4.02

Recent options activity in Technology Select Sector SPDR (XLK) presents an opportunity to re-examine a number of Tech based ETFs that have exposure to Apple (AAPL) that may be in play throughout the month of December given potential “tax swaps” that are likely to occur and have been occurring heading into 2013.

XLK’s top holding is AAPL at 19.67% and market observers are certainly aware of the extreme volatility that AAPL stock has experienced, particularly throughout the past month. For AAPL bottomed as low as $505.75 heading into the week of Thanksgiving only to emerge a big winner after Black Friday, subsequently sending the stock back to the $580s in short order.

And despite the fact that AAPL is well off of its 2012 highs, the stock is still up an impressive 44.74% year to date and being the stock with the largest market capitalization of any publicly traded company is widely held, there are many holders whom are likely to consider their individual tax situations going into the new year for capital gains/losses reasons.

We expect to see an acceleration in AAPL focused individual equity trades, that may also involve AAPL options, especially as the price of the stock gyrates anywhere near the level it did in the month of November, this month heading into year’s end. These AAPL specific trades may correspond with ETFs for “tax swap” purposes, depending on the individual situations of portfolio managers whom are managing taxable accounts.

Other ETFs with heavy AAPL exposure that will likely see a jump in trading activity throughout the month include IYW (iShares DJ U.S. Technology, 23.37% weighting), QQQ (PowerShares QQQ, 19.72%), VGT (Vanguard Info Technology, 19.05%), IXN (S&P Global Technology Index, 18.10%), JKE (iShares Morningstar Large Growth, 14.52%), IWY (iShares Russell Top 200 Growth, 10.98%), ROI (WisdomTree Large Cap Growth, 10.50%), MGK (Vanguard Mega Cap 300, 9.95%), and XLG (Guggenheim Russell Top 50, 8.72%).

Technology Select Sector SPDR

tech-etf-apple-aapl

For more information on Street One ETF research and ETF trade execution/liquidity services, contact Paul Weisbruch at pweisbruch@streetonefinancial.com.

Search