From Zacks: When it comes to investing in the tech space, investors normally dwell around FANG stocks. The FANG stocks are Facebook (FB) , Amazon (AMZN) , Netflix (NFLX) and Google, which later restructured itself as Alphabet (GOOGL).
These players have dominated the technological sphere and boosted shareholders’ wealth for several years now.
But things turn bitter sometimes when overvaluation concerns and high-beta sell-off creep in. This year was no different as FANGs flopped right in the middle. After a rally, the biggest technology stocks collapsed on overvaluation concerns in June, with the top five tech companies including Apple AAPL losing more than $97.5 billion in market value in a single day (read: Forget Big Tech, Bet on These Overlooked ETFs).
If we rule out this issue, the technology sector has been on fire this year thanks to improving economic and industry fundamentals and Trump’s proposed corporate tax reform. The rise of new technology such as cloud computing, big data and Internet of Things has been the wind beneath the wings.
Notably, Trump also proposes a lower tax on over $2.6 trillion in offshore earnings. Overall, tax cuts and a one-time repatriation tax could boost share repurchases by companies. Now, tech behemoths hoard huge cash overseas and are poised to benefit the most from Trump’s proposed tax reform. Also, investors can expect higher dividend distribution or share buyback from this move.
Notably, Facebook and Netflix have solid weights in PowerShares NASDAQ Internet Portfolio (PNQI – Free Report) and First Trust Dow Jones Internet Index (FDN – Free Report) . Facebook has a solid weight in iShares U.S. Technology ETF (IYW – Free Report) and Global X Social Media Index ETF (SOCL – Free Report) . Now, PNQI is up 37.8%, FDN has gained 35.3%, IYW is up 33.8% and SOCL has jumped 53.1% (as of Dec 14, 2017).
But investors would be excited to know that there is a lot of winning tech ETF ways to make profits. These ETFs have proven more efficient that FANG funds so far this year.
The ARK Web x.0 ETF is an actively-managed ETF that invests primarily at least 80% of its assets in domestic equity securities and U.S. exchange traded foreign equity securities of companies that are relevant to the fund’s investment theme of Web x.0. The fund charges 75 bps in fees. Cloud Computing & Cyber Security takes about 23% of the fund followed by Big Data & Machine Learning that accounts for about 20% (read: 4 Reasons Why Investors Love Passive ETFs).
The fund seeks long-term growth of capital. Bioinformatics takes about 9.1% of the fund followed by 3D Printing (8.3%) and Autonomous Vehicles (7.5%). The fund charges 75 bps in fees.
The 72-stock fund looks to seek investment results of the AlphaShares China Technology Index. Tencent Holdings Ltd accounts for about 12.97% of the fund followed by Alibaba Group Holding-SP ADR which makes up about 10.6%. The fund charges 70 bps in fees and has a Zacks ETF Rank #2 (Buy).
The fund looks to track the EMQQ The Emerging Markets Internet & Ecommerce Index. Alibaba Group Holding-Sp accounts for about 9.09% of the fund followed by Autohome Inc-ADR with about 1.4%. The fund charges 86 bps in fees and has a Zacks ETF Rank #3 (Hold) (read: Emerging Markets Leading This Year: 5 Top-Performing ETFs).
ETFMG Video Game Tech ETF GAMR – Up 58.1%
The 45-stock fund tracks the EEFund Video Game Tech Index and gives exposure to companies actively involved in the electronic gaming industry including the entertainment, education and simulation segments. The fund charges 75 bps in fees (read: 5 Hot ETF Deals for the Holiday Season).
The Guggenheim China Technology ETF (CQQQ) closed at $59.45 on Friday, up $0.04 (+0.07%). Year-to-date, CQQQ has gained 68.56%, versus a 20.33% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Zacks Research.