QQQ Could See Major Rebalancing as Nasdaq 100 Weighting Changes
Nasdaq is aiming to reduce the weight of Apple, the juggernaut tech stock that currently accounts for 20.5% of the Nasdaq 100% and 20.36% of QQQ.
Nasdaq is aiming to reduce the weight of iPad maker Apple (AAPL), the juggernaut tech stock that currently accounts for 20.5% of the Nasdaq 100% and 20.36% of QQQ. When the rebalancing takes effect on May 2, Apple will account for just 12.3% of the Nasdaq 100.
More than $330 billion worth of assets track the index via exchange-traded funds, mutual funds, options and futures, according to the Wall Street Journal. QQQ had almost $24.4 billion in assets under management as of April 4, according to the PowerShares website.
Following the rebalancing, Google (GOOG) will see its weight in the Nasdaq 100 boosted to 5.4% from 3.8%. Intel (INTC) will be increased to 4.2% while Microsoft (MSFT) and Oracle (ORCL) will rise to 8.3% and 6.7%, respectively.
Counting Apple, 82 members of the Nasdaq 100 will see their weightings reduced, while 18, including the aforementioned names, will be increased, the Journal reported.
At the heart of the matter is that given the way the index is balanced, Apple accounts for far too big a percentage of the index's weight. As the Journal notes, Apple currently has a weight equivalent to five times the size of Google's while having a market cap that is just twice the size of the Internet search giant.
Nasdaq estimates that for every $1 billion directly tracking the index, such as through mutual funds or ETFs, 9.5 million shares will change hands, the Journal reported.
The Nasdaq 100 was formed in 1985 and tracks the 100 largest nonfinancial companies listed on the Nasdaq. QQQ has average daily volume of 66.1 million shares, making it one of the most active stocks trading in the US.
Editor's Note: This content was originally published on Benzinga.com by The ETF Professor.
Below, find some more great ETF and market content from Benzinga:
Google’s Gmail Motion Prank Could Be a Reality Soon
By Steven Anfield
Investing in Stupidity
By Louis Bedigian
Three Stooges Movie Casting Begins Here
By Steven Anfield
Lasting through April 15, 100% of the donations made to
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.