Facebook, Or That Social Media ETF?

May 08, 2017

Last week, the $774 billion gorilla in the room, Apple, announced its quarterly earnings, and before they reported its typical monster numbers, there were the stories that have become almost routine, such as, “ETFs To Play If You’re Bullish On Apple.”

I’m sure we here at ETF.com have been guilty of going down that road, being all-ETF, but placing blind faith into that kind of tunnel vision isn’t always the right move. While passive investing has been proven to be superior over time to stock picking, time frames are important.

However, if you’re truly bullish on Apple, shouldn’t you just buy its stock, and move on from trying to figure out which ETF is the best for your bullish Apple feelings?

That’s a good question, with no clear answer—unless there's a time line.

The general tech sector is a tougher nut to crack in terms of picking winners, and certainly Apple has seen some backsliding in the past, so holding, say, the Technology Select Sector SPDR Fund (XLK) rather than being all-in on Apple might make sense—again, depending on your time line.

Apple is burning up the performance charts this year, and no doubt contributed to the returns of XLK as its top holding, at 15%. But as reflected in the chart above, XLK is lagging Apple’s year-to-date gain by almost half. The two-year chart of Apple versus XLK, though, tells a different story. XLK is up 34% to Apple’s gain of 22%

That’s the thing with tracking performance of any investment: What time frame are you viewing it through?

 

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