The last time we profiled Wheaton, IL-based First Trust in terms of their largest fund offering, the ETF mentioned was FV (First Trust Dorsey Wright Focus 5, Expense Ratio 0.89%), but this fund has actually slipped to number three in terms of asset size within the fund family.
Presently, FDN (First Trust Dow Jones Internet Index, Expense Ratio 0.54%) is the largest ETF in the First Trust family, with $4.2 billion in assets under management, including a fresh $180 million in via creation flows thus far in 2017. The number one holding in FDN, AMZN (8.62%), recently reported earnings and today is once again pivoting around new all-time highs with a $944 handle.
Meanwhile, the second largest holding in the fund, FB (8.42%), is slated to release its quarterly earnings result this Wednesday, May 3 after the market close. FB is also trading at a new all-time high today with a $152 handle, notably ahead of its earnings results, and the stock has taken a significant leg up since mid-April.
The top ten holdings within FDN round out as follows: 3) NFLX (5.35%), 4) GOOGL (4.98%), 5) PYPL (4.88%), 6) GOOG (4.86%), 7) CRM (4.82%), 8) YHOO (4.32%), 9) EBAY (3.76%), and 10) EXPE (3.09%). Not only is FDN First Trust’s largest fund currently in terms of asset size but it is also the largest “Internet” equity based ETF in the U.S. listed landscape — and by a very wide margin.
The second largest fund in this space is less than 1/10th the size of FDN in terms of asset size, and it is the $351 million PNQI (PowerShares NASDAQ Internet Portfolio, Expense Ratio 0.60%). FDN and PNQI are the only two listings in ETF land currently that deal specifically with U.S.-listed Internet companies, and one would think that with the over $4 billion invested in FDN alone that there would be investor demand for more alternatives in this space in general.
While it is true that “Internet” stocks infamously crashed and burned in the early 2000s after the euphoria of the late 1990s, the landscape is much different these days in terms of actual internet services provided and business models of component companies. If we look at “Internet” based funds with exposures to companies outside of the U.S., we see the $331 million KWEB (Krane Shares CSI China Internet, Expense Ratio 0.72%) and EMQQ (Emerging Markets Internet & eCommerce, Expense Ratio 0.86%, $46 million in AUM).
The First Trust Dow Jones Internet Index Fund ETF (NYSE:FDN) was trading at $93.07 per share on Monday afternoon, up $0.83 (+0.90%). Year-to-date, FDN has gained 16.59%, versus a 6.84% rise in the benchmark S&P 500 index during the same period.
Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.
Paul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.
He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.