Tag Archives: socl

ETF News

Social Media Popularity Doesn’t Show In Social Media ETF

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MarketsMuse blog update profiles the social media ETF, The Global X Social Media Index ETF (SOCL). So far this year, SOCL has not been performing very well, which is in contrast to social media performance in everyday life. Social media sites are gaining more users everyday however the trend doesn’t show in SOCL’s performance. Investopedia’s article “Is Social Media ETF SOCL Too Risky?” by Dan Moskowitz investigates the reason this trend occurs. Extracts from the article are below. 

The world is atwitter social media and its rapid growth right now. According to the Pew Research Center, 74% of online adults use a social networking site of some kind, up from 29% in 2008. And more advertising opportunities are blooming alongside the increased usage of mobile devices. In March, for the first time ever, the number of mobile-only internet users exceeded the number of desktop-only internet users, according to research firm comScore.

One of the trendiest ways to invest in social media is via the Global X Social Media Index ETF (SOCL), which tracks the largest publicly held social media firms around the world, including Facebook Inc. (FB), LinkedIn Corp. (LNKD) and Twitter Inc. (TWTR). With the sector’s global growth expected to continue for the long haul, betting on SOCL seems like a no-brainer.

What’s tricky with SOCL is that the trend doesn’t always match the performance. 

For starters, SOCL returned -15.04% in 2014. Take a look at SOCL’s top ten holdings, their percentage of assets, and their one-year stock performances 

The heavier-weighted holdings are performing well, but the 0.65% expense ratio for SOCL comes into play. Also notice that some of the weaker-performing stocks belong to Wall Street darlings — buzzy startups investors loved during their IPOs — that have had difficulty delivering consistent profits: Pandora, Groupon and Twitter, if you’re looking for a big industry name that’s falls farther down in SOCL’s holdings. If these companies are unable to deliver stock appreciation when markets are at all-time highs, then you shouldn’t expect them to perform well when the market takes a turn for the worse.

More people are accessing social media sites every day, a very positive trend. But without positive returns, that trend is irrelevant. Some of the companies/holdings for SOCL have difficulty delivering consistent profits and haven’t yet shown investors a clear-cut path to how they’ll do it down the road. If that’s the case when the stock market is at all-time highs, then it’s highly unlikely for these stocks to appreciate if and when the market falters. Put simply, unless you’re looking for a short-term trade, consider avoiding SOCL. But if the broader market continues to move higher thanks to Federal Reserve assistance and basic momentum, there’s a possibility it will take SOCL with it. As always, do your own research prior to making any investment decisions.

To read the entire article profiling the ETF SOCL, click here.

 

 

ETF News

Twitter’s Weak Q1 Jolts Social ETFs

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MarketsMuse blog update profiles the disappointing Q1 for Twitter and the impact it is having on social media ETFs such as Renaissance IPO ETF (IPO), Global X Social Media Index ETF(SOCL) and ARK Web x.0 ETF (ARKW). This MarketsMuse update is courtesy of Zacks Equity Research and their article, “Twitter Tweets a Weak Q1 & Soft View, ETFs in Focus“, with an excerpt below. 

On April 28, Twitter (TWTR) came up with a weak Q1 and a disappointing guidance. The social networking site then saw a freefall in its share price as it failed to live up to many investors’ expectations.


Q1 in Detail

The company’s first-quarter 2015 non-GAAP loss per share (including the stock-based compensation expense) of 20 cents was a penny ahead of the Zacks Consensus Estimate. Excluding the stock-based compensation expense, the company earned 7 cents per share on a pro forma basis.

Revenues of $436 million in the quarter fell shy of the Zacks Consensus Estimate of $455 million. ‘A lower-than-expected contribution from newer direct response marketing products’ was held responsible for lower-than-expected revenues. However, revenues grew about 74% year over year.

Market Impact

This subdued performance dampened investors’ mood as the stock was severely beaten down in recent trading sessions. Following the earnings leak on April 28, about 40 minutes ahead of the closing bell, Twitter shares saw a landslide, plunging over 18% for the key trading session of April 28 on about fourth times the regular volume.

Shares slid about 8.9% on April 29. However, after such a massive sell-off for consecutive two days, Twitter stock recouped 0.94% after hours. Year to date, the stock is still up 8.3%.

Twitter does not have a sizable exposure in the overall ETF world with only three ETFs – Renaissance IPO ETF (IPO), Global X Social Media Index ETF(SOCL) and ARK Web x.0 ETF ((ARKW – ETF report)) – having major exposure of 8.17%, 3.66% and 3.20% respectively, at present. Such a huge fall in one of the major components should impact these ETFs.  Below, we have discussed these three funds in detail:

To continue reading about Twitter’s disappoint Q1’s impact on ETFs, click here

ETF News

Social Media ETF Index Weights Facebook (FB) at 8.8%

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The Solactive Social Media Index, the index tracked by the Global X Social Media Index ETF (Nasdaq: SOCL), has allocated 8.8% of its weight to Facebook (Nasdaq: FB), according to Global X. The Global X Social Media Index ETF, the lone ETF devoted exclusively to the burgeoning social media ETF, has been widely viewed as the first ETF destination for Facebook, the largest social media company.

It was expected that the index would add Facebook following the end of the stock’s fifth trading, which was Thursday May 24, and that the change would be reflected in the ETF on the next trading day.

Global X could not confirm the weight of Facebook within SOCL, but assuming the 8.8% allocation from the index carries over to the ETF, Facebook would have been SOCL’s fourth-largest constituent on Thursday behind LinkedIn (NYSE: LNKD), China’s Tencent Holdings and Sina (Nadaq: SINA).

SOCL has lost about 5% since Facebook’s IPO on May 18, but the ETF has seen it’s assets under management surge to over $25.1 million from $16 million and its average daily volume jump to over 50,000 shares from 36,000 shares.

At the close of markets on May 24, SOCL was home to 27 stocks with other prominent names including Google (Nasdaq: GOOG), Groupon (Nasdaq: GRPN) and Yelp (NYSE: YELP).

Read more: http://www.benzinga.com/trading-ideas/long-ideas/12/05/2617744/social-media-etf-index-weights-facebook-at-8-8#ixzz1vtceHIRe
ETF News, People Profiles, Tech Talk

Social Media ETF: Is this a tipping point

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In a Nov 15 story from CNN: the prospects for social media ETF “SOCL” were pretty much slammed.

“NEW YORK (CNNMoney) — A social media exchange-traded fund has made its debut, but experts say to hold off before you “like” and “+1″ it to share it with all of your friends.

While the Global X Social Media ETF (SOCL), which began trading Tuesday at $14.98 per share, includes buzzworthy initial public offerings Groupon (GRPN), LinkedIn (LNKD), and Pandora (P), it lacks the world’s two rock star social media platforms since they have yet to go public: Facebook and Twitter.

“ETF and mutual fund providers have a habit of launching funds that they think will collect money from investors, but not necessarily make money for investors,” said Rick Ferri, founder of Portfolio Solutions and author of The ETF Book. “And I think this might be one of those ETFs.”

That’s why Ferri and other experts are dismissing the investment value of the ETF, calling it “premature” and a “gimmick” that’s capitalizing on the popularity of social media companies even though their record of generating profits is erratic.

“I don’t think the firms in this ETF are great proxies for the potential performance of Facebook and Twitter, and I think investors will be disappointed,” said Christian Magoon, CEO of Magoon Capital and an ETF industry consultant…”

Fast-forward a few months, and the above observations are [arguably] still accurate, if only judging by today’s chart:

But that’s not the point of this particular post, particularly when considering this ETF is still in its infancy, and regardless of whether this publication agrees or disagrees with above-noted observations.

The more poignant point is the inroads that social media applications are making within the financial services ecosystem. We’ve commented on this topic in the past (and will continue to!)…but we wanted to share a nice video clip that we just tripped over, courtesy of InvestmentNews’ coverage of a recent TD Ameritrade Conference.

This is Not to promote TD (unless they want to sign up as an advertiser on this site), but the video clip is worth watching if you’re an RIA, a consultant, or even if you’re a broker dealer. More…

[brightcove vid=1450098930001&exp=1079049310&w=300&h=225]