Financial ETFs, Smart Beta Funds Gain On Apple Jitters

Financial sector funds have been particularly popular these days as they rally to test multimonth highs, Weisbruch noted.

ETFs like the Financial Select SPDR ETF (NYSEArca: XLF) and the iShares Dow Jones US Financial Index Fund (NYSEArca: IYF) are indeed garnering investor attention. In the past five days alone, XLF and IYF have each gained roughly 2 percent.

The $8.36 billion XLF ranked as the sixth-most-popular fund in the week ended Thursday, Oct. 11, with net inflows of nearly $152 million. All in all, XLF has hauled in a net of $823 million in the past month. IYF has picked up a net of $15 million in the same period, according to data compiled by IndexUniverse.

Another group of ETFs that could be poised to attract some of these reallocated dollars are tech funds that weight securities based on fundamentals or other quantitative measures, also known as smart beta funds, Weisbruch said.

Those who don’t want to bail out on owning Apple, but who also don’t want a single company to overrun the portfolio’s performance, might find that equally weighted or other alternative-weighting strategies work well for them.

Funds like First Trust’s Technology AlphaDex Fund (NYSEArca: FXL) as well as PowerShares’ Dynamic Tech Sector ETF (NYSEArca: PTF) could emerge indeed as solid alternatives to those who want to own stocks like Apple, he noted.

Apple currently represents roughly 1.9 percent of FXL’s portfolio, while PTF allocates 2.5 percent to the tech giant.

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