Best FANG Stocks ETFs for Q1 2022

0 Comments



FANG is an acronym for four companies: Facebook (now named Meta Platforms Inc.) (FB), Amazon.com Inc. (AMZN), Netflix Inc. (NFLX), and Alphabet Inc. (GOOGL). These companies represent a variety of different sectors, ranging from communication services to technology to consumer discretionary, but are often grouped together because they historically have been among the fastest-growing, most innovative, and most successful large companies in the world.

For investors seeking exposure to the FANG group without having to concentrate a portfolio in a few volatile stocks, a FANG-themed exchange-traded fund (ETF) might represent the best option. These four companies have attracted intense interest from investors because technology has driven their growth in areas such as e-commerce, mobile devices, cloud computing, and streaming entertainment.

Key Takeaways

  • FANG stocks, as represented by the tech, communication services, and consumer discretionary sectors, had a mixed performance relative to the broader market during the past year.
  • The ETFs with the best one-year trailing total returns are SKYY, XNTK, and VOOG.
  • The top holdings of these ETFs are DigitalOcean Holdings Inc., NVIDIA Corp., and Apple Inc., respectively.

Despite its popularity and wide use among investors, the acronym FANG may be a bit out of date because Google has since renamed itself Alphabet and Facebook has renamed itself Meta. Several variations have also emerged. Apple Inc. (AAPL) is often added to create a five-stock group known by the term FAANG. And some investors and analysts have even added Microsoft Corp. (MSFT) to make a six-stock group called FAAMNG, or the FAAMNGs. For simplicity, we’ll use the original FANG acronym in this story.

The sectors for each of these companies provide a rough benchmark for comparison to the broader U.S. market while illustrating their divergent characteristics. Facebook (Meta), Netflix, and Google (Alphabet) are in the communication services sector. That sector has posted a 32.9% one-year trailing total return, as measured by the performance of the S&P 500 Communication Services Sector Index. Amazon, on the other hand, is in the consumer discretionary sector, which has a one-year trailing total return of 31.6%, based on the S&P 500 Consumer Discretionary Sector Index. Meanwhile, Apple and Microsoft are in the tech sector, which has posted a one-year trailing total return of 39.6%, as measured by the S&P 500 Information Technology¬†Sector Index. The consumer discretionary and communication services sectors have underperformed the S&P 500’s one-year trailing total return of 33.9%, while the information technology sector has outperformed, as of Nov. 9, 2021.

There are 22 FANG stock ETFs that trade in the U.S., excluding leveraged and inverse funds as well as those with under $50 million in assets under management (AUM). These funds offer good exposure to the four FANG companies as well as other stocks. The best-performing FANG stocks ETF, based on performance over the past year, is the First Trust Cloud Computing ETF (SKYY). We examine the three best FANG stock ETFs below. All numbers below are as of Nov. 8, 2021.

  • Performance Over One-Year: 41.4%
  • Expense Ratio: 0.60%
  • Annual Dividend Yield: 0.15%
  • Three-Month Average Daily Volume: 225,108
  • Assets Under Management: $6.9 billion
  • Inception Date: July 5, 2011
  • Issuer: First Trust

SKYY is a multi-cap growth fund targeting the ISE CTA Cloud Computing Index. The index tracks the performance of companies involved in the cloud computing industry. To be included, companies must be classified as Cloud Computing companies by the Consumer Technology Association and must have market capitalization of at least $500 million, among other parameters. Nearly half of the funds’s assets are focused on companies in IT services, while technology hardware, storage & peripherals comprise more than 25%.

The top holdings of SKYY include DigitalOcean Holdings Inc. (DOCN), a cloud infrastructure provider; Arista Networks Inc. (ANET), a computer networking company; and class A shares of MongoDB Inc. (MDB), a database software company.

  • Performance Over One-Year: 38.4%
  • Expense Ratio: 0.35%
  • Annual Dividend Yield: 0.27%
  • Three-Month Average Daily Volume: 10,244
  • Assets Under Management: $772.8 million
  • Inception Date: Sept. 25, 2000
  • Issuer: State Street

XNTK tracks the NYSE Technology Index, which is comprised of 35 leading U.S.-listed technology-related companies. The fund, which is also referred to simply as the NYSE Technology ETF, provides exposure to technology-related companies primarily based in the U.S., although it also invests in companies based in China, Singapore, Canada, and Taiwan. XNTK’s biggest subindustry allocation is in the semiconductor industry, followed by systems software, internet and direct marketing retail, and a range of other technology-related industries.

XNTK is primarily a large-cap fund focused on investing in companies with high growth potential. Its top three holdings include NVIDIA Corp. (NVDA), a maker of graphics-processing units and chips; Tesla Inc. (TSLA), an electric vehicle and clean energy company; and sponsored ADRs of Sea Ltd. (SE), a Singapore-based global consumer internet company.

  • Performance over One-Year: 36.6%
  • Expense Ratio: 0.10%
  • Annual Dividend Yield: 0.60%
  • Three-Month Average Daily Volume: 106,641
  • Assets Under Management: $7.5 billion
  • Inception Date: Sept. 7, 2010
  • Issuer: Vanguard

VOOG is a large-cap growth fund that targets stocks in the S&P 500 Growth Index. Information technology companies make up more than 41% of the fund’s portfolio while communication services companies comprise 15.5%. VOOG’s top 10 positions account for just over half of all invested assets, and the vast majority of those 10 stocks are in IT or communications services. The top three holdings of VOOG include Apple, Microsoft, and Amazon.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.



Source link

Categories:

Leave a Reply

Your email address will not be published.

Share via
Copy link