One of the world's largest tech funds intends to expand its influence on Nvidia, which has become the world's most expensive company after the rapid growth of its shares, UNN reports with reference to Reuters.
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The $72.34 billion Technology Select Sector SPDR fund managed by State Street Global Advisors will buy about $10 billion worth of Nvidia shares while reducing its stake in Apple, Matthew Bartolini, head of SPDR America research at State Street, confirmed.
The changes are being made so that the fund can align its holdings with expected changes in the S&P Dow Jones Technology Select Sector index, which it tracks. According to Bartolini, as a result of the reshuffle, Microsoft and Nvidia will share first place in both the fund and the index, while Apple will take second place.
On Tuesday, chipmaker Nvidia became the world's most valuable company as its market value reached $3.33 trillion, surpassing Microsoft's.
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According to Jay Woods, chief global strategist at Freedom Capital Markets, so far 22.5% of the tech ETF's assets have been invested in Microsoft, 21% in Apple, and only 6% in Nvidia. This has caused the fund to lag its benchmark, as Nvidia shares have risen 173% this year.
By the end of trading this Friday, when the index will be rebalanced based on last Friday's market capitalization values, Microsoft will retain its dominance in the SPDR ETF portfolio with a weight of 21%. Nvidia's share will also be 21%, and Apple's share will fall to 4.5%, the publication says.