The Dow Jones Internet Composite Index, a widely followed collection of big-name internet stocks, hit a record high Monday and is higher by 23.58% year-to-date.
That sounds impressive and it is. Led by the likes of Amazon.com (NASDAQ: AMZN), Facebook (NASDAQ: FB) and Google parent Alphabet (NASDAQ: GOOG), nothing seems to be derailing internet equities in 2020.
The exchange-traded fund that tracks Dow Jones Internet Composite Index is the largest in the category and hit a record high yesterday, too, but that doesn’t mean it’s the best fund in the lot. As is the case with market segments, some “quiet” ETFs can deliver potent punches in the internet arena.
Consider this trio, which also joined the all-time high club on Monday.
O’Shares Global Internet Giants ETF (OGIG)
Just two weeks past its second birthday, the O’Shares Global Internet Giants ETF (NYSE: OGIG) has $247.1 million in assets under management, so it’s not sneaking up on rivals anymore, but its outperformance of those competitors may be sneaking up on investors. Year to date, OGIG is up 44.68%, meaning it’s topping the biggest fund in this category by more than 2,100 basis points.
Interestingly, OGIG’s drubbing of its larger rival is being accrued despite the O’Shares ETF allocating just 15% of its combined weight to Amazon, Facebook and Alphabet.
The secret to OGIG’s success isn’t much of a secret, but it’s meaningful nonetheless: the fund features exposure to international (mainly Chinese) internet stocks while many of its rivals are devoted solely to U.S. stocks.
SPDR S&P Internet ETF (XWEB)
Though in more modest fashion than the aforementioned OGIG, the SPDR S&P Internet ETF (NYSE: XWEB) is also beating the biggest internet ETF on a year-to-date basis.
That’s impressive because XWEB is an equal-weight ETF, meaning Amazon and Facebook are no more important to this fund’s fortunes than say Snap (NYSE: SNAP) or Pinterest (NASDAQ: PINS). In fact, Amazon and Facebook combine for less than 5% of XWEB’s weight.
The median market capitalization of XWEB’s 42 components is $8.7 billion, underscoring a lean toward mid-cap territory. Up 78.62% in the current quarter, XWEB also hit an all-time high yesterday.
Global X Social Media ETF (SOCL)
The Global X Social Media ETF (NASDAQ: SOCL) is still the only dedicated social media ETF and at almost nine years old, it’s ancient by the standards of internet ETFs. Sometimes, things get better with age.
After hitting a record on Monday, SOCL is up 61.16% in the second quarter. What makes the fund’s recent bullishness all the more impressive is its combined 18.60% weight to Facebook and Twitter (NYSE: TWTR) – two companies that seemingly invite political controversy whenever they can.
Like OGIG, SOCL offers investors the benefit of international exposure as roughly 62% of its 41 holdings aren’t domestic companies.
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