June 18 (Reuters) - One of the world's largest

technology funds is set to ramp up its exposure to Nvidia ( 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 Global Advisors, will buy some

$10 billion shares of Nvidia ( NVDA ) while slashing its exposure to

Apple ( AAPL ), 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 ( MSFT ) and Nvidia ( NVDA ) sharing the top spot

in both the fund and the index, with Apple ( AAPL ) becoming the

runner-up, according to Bartolini.

On Tuesday, chipmaker Nvidia ( NVDA ) became the world's most

valuable company as its market value hit $3.33 trillion,

surpassing that of Microsoft ( MSFT ).

Until now, the technology ETF had 22.5% of its assets

invested in Microsoft ( MSFT ), 21% in Apple ( AAPL ), and only 6% in Nvidia ( NVDA ),

according to Jay Woods, chief global strategist at Freedom

Capital Markets. That caused the fund to underperform its

benchmark as Nvidia's ( NVDA ) 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 ( MSFT ) will retain its dominance within the SPDR

ETF's portfolio, with a 21% weighting. Nvidia ( NVDA ) will have a 21%

weighting as well, while Apple ( AAPL ) will plunge to 4.5%.

Nvidia's ( NVDA ) shares were recently up 3.7% at $135.85 while

Apple's ( AAPL ) were off 1.5% at $213.33.

"The fact that Nvidia ( NVDA ) is up and Apple ( AAPL ) shares are down

today may reflect that a rebalancing" in the ETF already is

underway, Steve Sosnick, chief strategist at Interactive

Brokers.

Index and portfolio construction rules mean that only two of

the three technology giants can be held at a full weight -- 21%

-- in the ETF. Any other large positions can't exceed 4.5%. The

rule, set in place in 1998 when the index was launched, caps

total exposure to all stocks with a weighting of more than 5% in

the broader Standard & Poor's 500 index at 50% of the portfolio.

The fact that three technology giants are vying for the top

two spots in the ETF's portfolio is "unprecedented," Bartolini

noted.