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Should You Invest in the Global X Social Media ETF (SOCL)?

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Looking for broad exposure to the Technology - Internet segment of the equity market? You should consider the Global X Social Media ETF (SOCL - Free Report) , a passively managed exchange traded fund launched on 11/14/2011.

While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.

Sector ETFs also provide investors access to a broad group of companies in particular sectors that offer low risk and diversified exposure. Technology - Internet is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 10, placing it in bottom 38%.

Index Details

The fund is sponsored by Global X Management. It has amassed assets over $254.87 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Internet segment of the equity market. SOCL seeks to match the performance of the Solactive Social Media Total Return Index before fees and expenses.

The Solactive Social Media Index is designed to reflect the performance of companies involved in the social media industry, including companies that provide social networking, file sharing, and other web-based media applications.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.65%, making it on par with most peer products in the space.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

Looking at individual holdings, Meta Platforms Inc accounts for about 10.62% of total assets, followed by Tencent Holdings Ltd and Snap Inc - A (SNAP - Free Report) .

The top 10 holdings account for about 63.51% of total assets under management.

Performance and Risk

The ETF has lost about -22.44% so far this year and is down about -41% in the last one year (as of 03/04/2022). In that past 52-week period, it has traded between $41.92 and $72.64.

The ETF has a beta of 0.95 and standard deviation of 29.29% for the trailing three-year period, making it a high risk choice in the space. With about 44 holdings, it has more concentrated exposure than peers.

Alternatives

Global X Social Media ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, SOCL is a reasonable option for those seeking exposure to the Technology ETFs area of the market. Investors might also want to consider some other ETF options in the space.

ARK Next Generation Internet ETF (ARKW - Free Report) tracks N/A and the First Trust Dow Jones Internet ETF (FDN - Free Report) tracks Dow Jones Internet Composite Index. ARK Next Generation Internet ETF has $2.28 billion in assets, First Trust Dow Jones Internet ETF has $6.94 billion. ARKW has an expense ratio of 0.83% and FDN charges 0.51%.

Bottom Line

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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