Huge tech ETF set to buy $10 billion in Nvidia shares

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One of the world’s largest technology funds is set to ramp up its exposure to Nvidia (NASDAQ:NVDA), which has become the world’s most valuable company following a blistering run in its shares.

The $72.34 billion Technology Select Sector SPDR Fund, managed by State Street (NYSE:STT) Global Advisors, will buy some $10 billion shares of Nvidia while slashing its exposure to Apple, Matthew Bartolini, head of SPDR Americas research at State Street confirmed.

The changes are being made so the fund can bring its holdings inline with pending changes to the S&P Dow Jones Technology Select Sector index, which it tracks. The reshuffle would leave Microsoft (NASDAQ:MSFT) and Nvidia sharing the top spot in both the fund and the index, with Apple becoming the runner-up, according to Bartolini.

On Tuesday, chipmaker Nvidia became the world’s most valuable company as its market value hit $3.33 trillion, surpassing that of Microsoft.

Until now, the technology ETF had 22.5% of its assets invested in Microsoft, 21% in Apple, and only 6% in Nvidia, according to Jay Woods, chief global strategist at Freedom Capital Markets. That caused the fund to underperform its benchmark as Nvidia’s shares rose 173% this year.

By the end of trading this Friday, when the index rebalancing takes place based on last Friday’s market cap values, Microsoft will retain its dominance within the SPDR ETF’s portfolio, with a 21% weighting. Nvidia will have a 21% weighting as well, while Apple will plunge to 4.5%.

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