Tech giant Apple has been swatted by the U.S. government lately over e-book price-fixing, while the company has watched its dominance in mobile phones and tablet computing erode as more competitors enter those markets. But for exchange-traded funds that track growth stocks, none of this matters, according to data prepared for Institutional Investor by New York–based financial data firm Axioma. Of the 11 growth ETFs examined by Axioma, eight had Apple as their largest holding.

The iShares Morningstar Large Growth Index Fund (fund A in the chart below), had the largest holding, with 10.94 percent of its assets in the iPhone maker. The Vanguard Mega Cap 300 Growth Index Fund has the second-largest holding, with 8.65 percent. The Vanguard Growth Index Fund, the SPDR S&P 500 Growth ETF and the Schwab U.S. Large-Cap Growth ETF have 6.77 percent, 6.27 percent and 5.77 percent, respectively (see chart 1 below).

To Melissa Brown, senior director of applied research at Axioma, the heavy concentration in Apple shares among some growth ETFs is cause for concern. “Apple is a very big stock in the market, so maybe it’s not that surprising, but it really is betting big on Apple,” she says. “If you’re buying that iShares Morningstar Large Growth Index Fund, for example, that’s probably something you should know.”

Chart 1
Chart 1
A iShares Morningstar Large Growth Index Fund; B iShares Russell 3000 Growth; C Vanguard Mega Cap 300 Growth Index Fund; D First Trust Large Cap Growth Alphadex Fund; E Guggenheim S&P 500 Pure Growth ETF; F Vanguard Russell 1000 Growth; G iShares Russell 1000 Growth; H Schwab U.S. Large-cap Growth ETF; I Vanguard Growth Index Fund; J Powershares Dynamic Largecap Growth Portfolio; K SPDR S&P 500 Growth ETF

Growth ETFs tend to have a high percentage of their assets in technology and consumer discretionary stocks, as chart 2 below shows. But the actual mix of shares in technology and consumer discretionary companies is anything but uniform, according to Axioma’s analysis. “Apparently, what growth means varies very widely from ETF to ETF,” says Brown. “Probably even more than with other ETF strategies, the differences here look bigger than any other ETFs we’ve looked at.”

Chart 2
Chart 2

Not all growth ETFs, however, are making a big bet on Apple. Three of the funds (the First Trust Large Cap Growth Alphadex Fund, the Guggenheim S&P 500 Pure Growth ETF and the Powershares Dynamic Largecap Growth Portfolio) have no exposure at all to the Cupertino, California–based computer maker.