The Technology Select Sector SPDR Fund, managed by State Street Capital Advisors, is set for a major overhaul later this month. This move will result in a shift in exposure to NVIDIA Corp and Apple Inc, leading to billions of dollars in trading volume. After Nvidia’s market value closed above Apple on Friday, State Street plans to buy $11 billion of Nvidia shares and sell $12 billion of Apple shares. This change will reverse the positions of the two companies in the ETF.
Matt Bartolini, head of SPDR Americas Research at State Street, explained that the ETF must comply with diversification regulations and will rebalance according to its rules and methodology. However, S&P may make exceptions when unveiling sector weightings at the end of the month as indicated in a document seen by Bloomberg News. The index committee has the authority to make exceptions if necessary.
The Technology Select Sector SPDR Fund gained 1.52% to close at $231.12 on Monday while Nvidia Corp slipped 0.68% to end the day at $130.98 and Apple Inc gained 1.97% to close at $216.67.
