For months, XLK has held way fewer Nvidia shares even as the AI giant soared 166% year-to-date. When the chipmaker ranked in third place, it made up roughly 6% of the ETF’s assets, compared with 22% in the S&P 500 Information Technology Index. The ownership cap, imposed under diversification rules, has caused XLK to underperform massively this year.
One of the world’s most prominent technology ETFs looks poised for a big rebalancing that would ramp up exposure to Nvidia Corp. at the expense of Apple Inc. – spurring billions of dollars in trading volume in one fell swoop.
Barring an 11th-hour deviation from the methodology set out by index provider S&P Dow Jones Indices, State Street Global Advisors is on track to revamp the composition of its US$71 billion Technology Select Sector SPDR Fund (ticker XLK) after Nvidia’s market value closed above Apple on Friday.
