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Nvidia to Get 20% Weighting and Billions in Investor Demand, While Apple Demoted in Major Tech Fund
As the Technology Select Sector SPDR Fund (XLK) undergoes a rebalance based on adjusted market cap values from the previous Friday's close, Nvidia is poised to experience a significant surge in investor demand. This rebalance will result in the fund acquiring over $10 billion worth of $NVDA shares and selling an equivalent amount of $AAPL stocks.
According to Matthew Bartolini, head of SPDR Americas Research, this adjustment will lead to $MSFT emerging as the largest stock in the index, with a projected weight of approximately 21%, closely followed by $NVDA at around 21%. Meanwhile, $AAPL will see its weight decrease to roughly 4.5%. Without diversification rules, all three stocks would have a weight above 20% in the index.
As of June 14, $MSFT and $AAPL held nearly identical weights of around 22% each in the fund, while $NVDA accounted for only 6%. The XLK manages approximately $71 billion in assets under management, making a 15-percentage-point shift in the fund equivalent to over $10 billion. SPDR does not disclose specific trading strategies regarding rebalances.
The impending rebalance, which takes effect at the end of this week, will significantly alter the weightings of these tech giants in the XLK index. Nvidia's meteoric rise has forced the fund to adjust its holdings, leading to a substantial increase in its stake in the chip giant, while Apple's presence will be scaled back.
Original Article: https://www.cnbc.com/2024/06/17/nvidia-to-get-20percent-weighting-and-billions-in-investor-demand-while-apple-demoted-in-major-tech-fund.html
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