Though looming trade tensions between the United States and some of its key partners, especially China, have kept investors cautious, the so-called FANG stocks — Facebook (FB - Free Report) , Amazon (AMZN - Free Report) , Netflix (NFLX - Free Report) and Alphabet (GOOGL - Free Report) — are surging to all-time highs. This is because their business is largely immune to trade and tariffs given their leadership and strength in their key industries.
Of this group, Netflix is the clear winner, surging about 103% this year. This is more than double the 47% rise for Amazon, the next best stock. Both Facebook and Alphabet have gained about 12.4% this year. Investors should note that Facebook shares have emerged strongly from the slide in the wake of a data scandal. Buoyed by the strength, the NYSE FANG index, which tracks the 10 biggest and most-active tech stocks in the world including these stocks, also hit a record high on Jun 20 (read: Fund Managers Bullish on America in June: 6 ETFs to Profit).
Investors continued to pour money into fast-growing companies thanks to robust earnings, a rising interest rate scenario and solid demand for cutting-edge technology. Additionally, the latest bout of upbeat data, which underscores a strong economy, instilled confidence and whet investors’ risk appetite in these stocks. Further, FANG stocks are backed by their strong fundamentals with expected earnings growth of 24.51% for FB, 180% for AMZN, 130.4% for NFLX and 25.65% for GOOGL. Amazon has a Zacks Rank #1 (Strong Buy) while other three FANG stocks carry a Zacks Rank #3 (Hold).
Given this, ETFs having the largest allocation to FANG stocks are also scaling new highs. Below, we have profiled five of them that hit their peak in the last trading session:
Invesco NASDAQ Internet ETF (PNQI - Free Report) – High Price: $147.58
This fund offers exposure to the largest and most liquid U.S.-listed companies engaged in Internet-related businesses by tracking the Nasdaq Internet Index. It holds about 95 stocks with FANGs accounting for nearly 32% of the portfolio. The ETF has AUM of $698.2 million while charges 60 bps in fees per year. It trades in a lower volume of around 45,000 shares a day. The product has a Zacks ETF Rank #1 (Strong Buy) with a High risk outlook and gained 26.1% this year (read: FIFA Frenzy Puts Spotlight on These Stocks and ETFs).
First Trust Dow Jones Internet Index Fund (FDN - Free Report) – High Price: $145.81
This is the most popular and liquid ETFs targeting the Internet sector, with AUM of $9.3 billion and average daily volume of around 585,000 shares. The fund follows the Dow Jones Internet Composite Index and holds 42 stocks in its basket with FANGs making up for nearly 30% allocation. Expense ratio comes in at 0.53%. The product has a Zacks ETF Rank #1 with a High risk outlook and surged 31.9% so far this year.
Invesco QQQ (QQQ - Free Report) – High Price: $177.98
This ETF provides exposure to 103 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. FANG stocks account for nearly 23% share in the basket. QQQ is one of the largest and most popular ETFs in the large-cap space with AUM of $67.8 billion and average daily volume of around 42.2 million shares. It charges investors 20 bps in annual fees. The fund has a Zacks ETF Rank #1 with a Medium risk outlook and risen 14.2% in the year-to-date time frame.
First Trust Cloud Computing ETF (SKYY - Free Report) – High Price: $55.46
This fund provides exposure to cloud computing securities by tracking the ISE Cloud Computing Index. It is home to 30 securities with each of the FANG stocks making up for over 4% share each. The ETF has amassed $1.7 billion in its asset base and sees a good volume of about 281,000 shares a day. It has 0.60% in expense ratio and a Zacks ETF Rank #2 with a Medium risk outlook. The fund is up 20.3% so far this year (read: 5 ETFs to Buy at 52-Week High).
iShares North American Tech ETF (IGM - Free Report) – High Price: $201.77
This ETF follows the S&P North American Technology Sector Index, giving investors exposure to 298 electronics, computer software and hardware, and informational technology companies. Out of these, FANG stocks account for nearly 21.5% share. The fund has AUM of $1.6 billion and charges 48 bps in annual fees. It trades in lower volume of nearly 46,000 shares a day and has a Zacks ETF Rank #1 with a Medium risk outlook. The ETF is up about 19% in the year-to-date time frame.
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