After the closing bell on Jul 18, International Business Machines
IBM
reported solid second-quarter 2022 results, wherein it beat earnings and revenue estimates. However, the company warned of a $3.5 billion forex hit.
Driven by revenue warnings, IBM shares tumbled as much as 4% in aftermarket hours. This has put ETFs having the highest allocation to this tech giant in the spotlight. These funds —
First Trust NASDAQ Technology Dividend Index Fund
TDIV
,
Invesco Dow Jones Industrial Average Dividend ETF
DJD
,
Amplify Transformational Data Sharing ETF
BLOK
,
SPDR NYSE Technology ETF
XNTK
and
iShares Blockchain and Tech ETF
IBLC
.
Earnings in Focus
Earnings per share came in at $2.31, surpassing the Zacks Consensus Estimate of $2.29 but declining 0.85% from the year-ago earnings. Revenues grew 9% year over year to $15.5 billion and edged past the consensus estimate of $15.1 billion (see:
all the Technology ETFs here
).
Strong demand at its consulting and infrastructure businesses drove the solid results. Consulting revenues increased 9.8% while infrastructure revenues climbed 19% from the year-ago levels.
Although a strong dollar and shutting down of Russia operations has put pressure on IBM’s near-term results, the company’s full-year revenues are still expected to grow at the upper end of mid-single-digit revenue growth at constant currency. Managment cautioned that the impact of the strongest dollar in more than two decades would erode full-year sales by around $3.5 billion.
ETFs in Focus
First Trust NASDAQ Technology Dividend Index Fund (TDIV)
First Trust NASDAQ Technology Dividend Index Fund provides exposure to dividend payers within the technology sector by tracking the Nasdaq Technology Dividend Index. It charges 50 bps in annual fees and holds about 91 securities in its basket. Of these firms, IBM takes the top spot, making up 8.8% of the assets (read:
Play Dirt-Cheap Dividend ETFs to Fight More Fed Rate Hikes
).
First Trust NASDAQ Technology Dividend Index Fund has amassed $1.6 billion in its asset base while trading in a volume of around 160,000 shares per day.
Invesco Dow Jones Industrial Average Dividend ETF (DJD)
Invesco Dow Jones Industrial Average Dividend ETF offers exposure to dividend-paying companies included in the Dow Jones Industrial Average by their 12-month dividend yield over the prior 12 months. It holds 28 stocks in its basket, with IBM occupying the top position accounting for 9%.
Invesco Dow Jones Industrial Average Dividend ETF has managed assets worth $220.5 million while trading in a volume of 58,000 shares a day on average. It charges 7 bps in annual fees and has a Zacks ETF Rank #3 (Hold).
Amplify Transformational Data Sharing ETF (BLOK)
Amplify Transformational Data Sharing ETF is actively managed, providing investors global exposure to a basket of the leading companies engaged in the development and utilization of blockchain technologies. It holds a basket of 49 stocks, with IBM taking the top spot at 5.2% of the portfolio. American firms dominate about 77% of the portfolio, followed by Asia Pacific (16.7%).
Amplify Transformational Data Sharing ETF has AUM of $519.9 million in its asset base and trades in an average daily volume of 367,000 shares. BLOK has an expense ratio of 0.71%.
SPDR NYSE Technology ETF (XNTK)
SPDR NYSE Technology ETF provides exposure to 35 leading U.S.-listed technology-related companies by tracking the NYSE Technology Index. IBM occupies the top spot with 5.1% of assets. Semiconductors take the largest share at 25.7%, while Internet & direct marketing retail, systems software and semiconductor equipment round off the next spots (read:
Could a Sustained Tech ETF Rally Be in the Cards?
).
SPDR NYSE Technology ETF has amassed $385.5 million and charges 35 bps in annual fees. It trades in an average daily volume of 16,000 shares and has a Zacks ETF Rank #2 (Buy).
iShares Blockchain and Tech ETF (IBLC)
iShares Blockchain and Tech ETF seeks exposure to a wide variety of companies that are involved in the development, innovation and utilization of blockchain and crypto technologies. It follows the NYSE FactSet Global Blockchain Technologies Index and holds 33 stocks in its basket. IBM takes the fifth spot with 4.8% of assets (read:
Bitcoin to Soar 40% to $28K by Year-End? ETFs to Play
).
iShares Blockchain and Tech ETF has gathered $5 million in its asset base and charges 47 bps in annual fees. It trades in a volume of 8,000 shares per day on average.
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