Apple (NASDAQ:AAPL) stock is off to a gain of over 40% year-to-date, and it has a coveted ‘Perfect 10’ TipRanks Smart Score. Excitement about the company’s newly-unveiled VR headset is starting to build. Even Warren Buffett is a fan of the stock. Apple has been Berkshire Hathaway’s (NYSE:BRK.B) largest position for a long time. In fact, after its 2023 run-up, it currently accounts for nearly half of Berkshire’s equity portfolio.
Investors looking to invest in Apple through ETFs are in luck because Apple is the largest company in the world by market cap (with a $2.8 trillion valuation), and it isn’t hard to find ETFs with a large position in it. Therefore, without further ado, here are three of the top ETFs with Apple stock exposure.
Apple is the VGT ETF’s top holding with a massive 23.5% weighting. Vanguard funds are known for their diversification, and aside from this large Apple position, VGT is no different. The $51.3 billion ETF holds 366 positions. Because it is a market-weighted ETF and Apple is the largest position in the index VGT tracks (the MSCI U.S. Investable Market Index (IMI)/Information Technology 20/50), Apple rises to the top with this large allocation.
Including Apple, VGT’s top 10 holdings account for 63.9% of the fund. Below, you’ll find an overview of VGT’s top holdings using TipRanks’ holdings tool.
VGT’s underlying index is comprised of companies within the Global Industry Classification Standard (GICS) information technology sector, which includes software and IT services companies as well as makers and distributors of technology hardware such as semiconductors, cell phones, and computers. Therefore, it’s no surprise to see plenty of familiar mega-cap technology names within VGT’s top 10, whether it’s Apple, Microsoft (NASDAQ:MSFT), or Nvidia (NASDAQ:NVDA).
You may be surprised to find payment network giants like Visa (NYSE:V) and Mastercard (NYSE:MA) coming in as the number four and five positions in a technology ETF, but note these are also fintech companies pushing innovation in the finance space.
In the chart above, you’ll see plenty of bright green Smart Scores. The Smart Score is TipRanks’ proprietary quantitative stock scoring system that evaluates stocks on eight different market factors. The result is data-driven and does not require any human intervention. A Smart Score of 8 or above is the equivalent of an Outperform rating. As you can see, VGT impresses in this department as nine of its top 10 holdings have Outperform-equivalent ratings. Furthermore, VGT itself features an ETF Smart Score of 8 out of 10.
VGT has been a strong performer over the years, and it is currently up 32% year-to-date. It has returned 16.5% over the past year, 17.8% annualized over a three-year time frame, and 19.1% annualized on a five-year basis. Further, VGT has returned 19.8% (annualized) over the past decade, and it’s hard not to be happy with that type of long-term return.
Another nice thing about VGT is its low fees. The ETF has an expense ratio of just 0.1%, meaning that an investor who puts $10,000 into the ETF will only pay $10 in fees in a year.
Is VGT Stock a Buy, According to Analysts?
Analysts are fairly positive on VGT, assigning it a Moderate Buy consensus rating. The average VGT stock price target of $456.65 implies upside potential of 9.04% from current levels.
Like VGT, the Technology Select Sector SPDR Fund is a low-fee, index-based fund investing in the technology sector. In XLK’s case, it invests in the technology sector of the S&P 500 (SPX).
Similar to VGT, Apple has a massive position here with its 22.9% weighting, although it’s not XLK’s largest holding. That honor belongs to Microsoft, which edges Apple out for the top spot with a 24.3% weighting. XLK holds far fewer stocks than VGT. It currently holds 65 stocks, and its top 10 holdings make up 71.6% of the fund. See below for an overview of XLK’s top holdings.
You’ll notice that beyond Apple and Microsoft, XLK and VGT share many of the same top holdings. One notable difference is that while VGT owns large positions in Visa and Mastercard, these stocks are not found in XLK as they are not part of the S&P 500 technology sector — they are part of the S&P 500 financial sector and can thus be found in the Financial Select Sector SPDR Fund (NYSEARCA:XLF).
As with VGT, you’ll find plenty of great Smart Scores here — 8 out of XLK’s top 10 holdings feature Smart Scores of 8 or better, and XLK itself boasts a strong ETF Smart Score of 8 out of 10.
XLK offers the same investor-friendly expense ratio as VGT (0.1%), and it also boasts a great track record of long-term performance like VGT. XLK is up 33% year-to-date, and it returned 7.7% over the past year. It has been very consistent on an annualized basis, with total returns of 19.2% annualized over the past three years, 19.5% annualized over a five-year time frame, and 18.9% over the past decade. These are the types of results that help investors to build wealth over the long run.
Is XLK Stock a Buy, According to Analysts?
The consensus analyst view on XLK is fairly similar to that of VGT — a Moderate Buy rating with an average XLK stock price target of $175.67, implying upside potential of 6.8%.
Lastly, the Invesco QQQ Trust ETF has become synonymous with technology stocks over the years, so it’s no surprise that it has a large Apple position. At 12.1%, QQQ’s Apple weighting is smaller than that of VGT’s or XLK’s, but this is still a sizable position in the grand scheme of things. Microsoft is ahead of Apple by a narrow margin with a 13.2% weighting. Check out the table below for a look at QQQ’s top holdings.
Because QQQ’s underlying index is the Nasdaq 100 (NDX), you’ll find that this list is dominated by the mega-cap tech names like Microsoft, Apple, Amazon (NASDAQ:AMZN), Nvidia, Meta Platforms (NASDAQ:META) and Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) that the Nasdaq is known for.
You may notice that names like Amazon and Tesla (NASDAQ:TSLA) are included here but absent from XLK, as it considers them to be consumer stocks. These stocks are not found in VGT’s underlying index either.
Pepsi (NASDAQ:PEP) is a notable outlier here, as it is clearly not a tech stock, but it is one of the largest stocks on the Nasdaq 100, so it makes the cut.
QQQ comes in a bit behind XLK and VGT in that six of its top 10 holdings have Smart Scores of 8 or above (as opposed to nine out of 10 for XLK and eight out of 10 for VGT). Nonetheless, QQQ itself features a strong ETF Smart Score of 8.
QQQ’s expense ratio is higher than that of VGT or XLK at 0.2%, but this is still an investor-friendly expense ratio, and it is still a lower fee than you will find with many other ETFs out there.
Like the other two funds discussed here, QQQ is another long-term winner. As of the end of the most recent quarter, the Nasdaq-focused ETF has returned 32% year-to-date. Moreover, it has posted annualized total returns of 19.8% over the past three years, 15.7% over the past five, and 17.7% over the past 10 (as of March 31).
Is QQQ Stock a Buy, According to Analysts?
Analysts also rate QQQ a Moderate Buy at current levels and see it as having similar upside potential of 9.5% based on the average QQQ stock price target of $385.11.
It’s hard to go wrong with any of these three ETFs, and in many ways, they are very similar. QQQ is slightly different in that it offers lower exposure to Apple (although it still gives investors double-digit exposure) and features more of the typical mega-cap tech and FAANG names that many investors likely associate with Apple.
Meanwhile, these types of other names are not as prominent (or are missing altogether) from VGT and XLK, but they both give you Apple exposure of roughly 20% and similar stakes in Microsoft. QQQ features a higher expense ratio than VGT or XLK, but it is still a moderate expense ratio.
All three of these tech-focused funds offer investors significant exposure to Apple, and all three have impeccable long-term performance track records. Furthermore, they all feature low expense ratios. For investors with a long time horizon and an interest in Apple as well as its tech peers, these ETFs look well-positioned to continue providing solid long-term returns.