Bloomberg Breaks Down Apple's Stock Performance And How It Affects ETFs

It is well understood by the investment community that

is a heavyweight stock given its approximately $500 billion. However, it isn't as clear what affect Apple has in the electronic traded funds (ETFs) that hold it stock.

breaks down the facts. "People will sometimes say that ETFs are the tail wagging the dog," he explained. However, "Apple is the tail wagging the ETF." Balchunas noted that Apple's stock is top the holding in 5 of the 6 largest ETFs, including

as they are market cap weighted. He continued that the recent approximate 16 percent decline in Apple's stock over the past 2 weeks erased approximately $2 billion in value among ETF holders. "When you look at these ETFs, you sort of live by the big-stock sword and you die by the big-stock sword," he argued. Meanwhile, companies of smaller cap size that outperform the market, such as

, can not make up the difference and counter Apple's negative affect on the ETF. On the other hand, Apple is an outsized contributor to growth in ETFs when its own stock grows. For example, the

has gained 200 percent over the past 7 years and Apple's performance was responsible for 40 percent of those gains.